Things Your Should Know About Balance Transfer Credit Cards

If you are considering transferring your debt from a high interest credit card to a 0% APR credit card there are some things that you need to know. Let’s take a look.

Your Credit Card Debt Will Not Go Away

Don’t get the false impression that your debt will somehow diminish. While you will save in interest when it comes to your payments, in essence you are using one credit card to pay off another. The debt simply gets transferred, and is still in your name. While a 0% APR balance transfer is the first step in the process, committing to paying down your debt is the most important step you need to take.

Your Payments Will Be Simplified

If you have more than one credit card that you have racked up debt on and you can transfer all of your debt to a high limit credit card, your payments will be easier. First, you will now only have one payment to remember to make each month. Second, your minimum payment each month very well may be lower than the total combined payments you were making when you had debt on multiple cards.

Don’t Be Fooled Into Thinking There Won’t Be Fees

You will be hard pressed to find credit card offers that charge no balance transfer fee and if you do find one, consider yourself very lucky. Most cards charge a percentage of the amount you will be transferring. The average is around 3%, but some cards do charge less and some even charge more.

Beware That Your Introductory Rate Will Expire

The low rate that enticed you to the balance transfer credit card will not last forever. Most expire anywhere between six months and one year with a select few giving you up to 24 months. Make sure you know when your teaser rate will expire and do your best to pay your balance off by that time. Your interest rate, depending on the card you have chosen can skyrocket at that time.

Avoid Getting Into The Transferring Cycle

While you may think you don’t need to worry about paying off you credit card, that you can just transfer again when your rate expires, you may want to think again. While this might sound like a viable solution, it can damage your credit score. With high credit card debt you can be considered high risk when it comes to borrowing money for other items like a car or a home.

You Will Need Good Credit

To qualify for a balance transfer credit card, you will need good and maybe even excellent credit to qualify, so keep that in mind before applying.