Balance transfer credit cards are a popular option for those looking to reduce their debt burden. In recent times we've seen many people suffer financial setbacks, especially as the recession bites hard into all of us. With high petrol costs, rising food bills and wages that just don't rise fast enough, it's no wonder many people find themselves struggling financially. If you're one of the many people out there who is struggling to make ends meet, maybe balance transfer credit cards are just what you need.
By transferring your current credit card balances to an interest free introductory offer, you can dramatically reduce your monthly outgoings while enjoying the convenience of a lower interest rate. But how do you find a low interest rate? The first place to check is on the internet. Using a specialist credit card website will enable you to search the market place to locate the best deals, allowing you to compare and contrast the pros and cons of different offers. However, take care not to rush into making any decisions, because even the best offers have risks attached.
A low interest rate can only be as good as the conditions behind it. For example, how long has the introductory period been? How much interest has been added onto the cost of the balance? How many months are left to take advantage of the reduced interest rate? By taking some time to find the best deal possible, you could save hundreds.
Balance transfer credit cards are an ideal way of reducing the cost of your credit cards. If used correctly, they can be a very effective financial tool. The most important thing when using these cards is to make sure you read the terms and conditions carefully. Many credit card providers offer introductory rates that seem too good to be true. They may also charge a fee for balance transfers that amount to a large sum.
Be aware of any fees and charges. It is a good idea to read the fine print of any offer you are considering, so you know exactly what you are getting. Do not make any decisions based on an introductory rate alone. Also look out for charges such as “activity” and “billing”. These are simply fees you will owe to the credit provider if you go over your credit limit or fail to make payments on time. Any interest or finance charges will add to your total debt, so make sure you know what you are signing before making a commitment.
Another useful feature of credit cards with no balance transfer fees is that they allow you to build up your credit rating. This can be useful if you are uncertain about your future finances or do not feel comfortable using a credit card to make large purchases. By paying off the credit card in full each month, you can quickly raise your credit rating and become eligible for lower interest rates. Once you have sufficient credit to purchase items at major department stores or to make large purchases without interest charges, then you can apply for a card with a low interest rate and no balance transfer fees. You will need to build your credit rating again by paying off the new credit card and keeping it paid off for a few months, but this will give you a good foundation for building credit once more.
The key to credit cards with no balance transfer fees is to start slowly. Use your new card to pay small amounts each month until you get into a reasonable credit situation. In the meantime, pay off as much of your outstanding credit card balance as possible. If possible, close old credit card accounts that you have never used, since this will help to reduce the amount of debt you have. If you have multiple credit cards with high balances, the best way to pay them all off is to cancel the card with the highest interest rate and the highest balance and transfer it to the card with the lowest balance.
Another way to use a credit card to its maximum effectiveness is to pay it off at the end of every month. This means that you will be able to pay off the balance without taking any interest or other fees on the balance. If you pay the full amount at the end each month, you will be reducing the number of months you have to pay interest, but you will also be reducing the amount of money you need to repay each month. After a short time, you can probably choose to eliminate your credit card debt completely. However, it is important to start slowly with zero balance credit cards, by paying just a small amount each month so that you can gradually rebuild your credit rating.