Personal Finance guide

A balance transfer allows a person to transfer a balance from one credit card to another credit card. There are many reasons why a person would want to do this. First, a person might wish to transfer a balance from one card to another if the new card is running a special with a 0 balance transfers option. This would mean that for the balance that the person transfers in, there would not be any interest rate. Normally this 0% interest rate is just a promotional term and will end after the specified period of time, but that time of 0% interest could allow a person to pay down a good portion, if not all of their credit card debt balance. If a person is struggling to pay down their balance and they wish to find a way to get ahead on their debt payments, this could be an excellent option to pay down more debt than the person normally would be able to.

Another reason that a person would want to transfer their balances from one credit card to another is if the current credit card company has changed their fee structure. Many credit card companies change their fee structure every year and the change in fee structure might take a low fee card and change it into a not so low fee card. This change could cost a person a lot of extra money in fees and penalties, which might motivate that person to transfer their balance to another card.

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As more of us struggle to pay off high interest debt, 0% or low rate balance transfers are coming to the rescue. Or are they? Balance transfers can be really handy, provided you’re aware of some of their shortcomings. Here is our list of the top 7 things you need to know when contemplating a balance transfer.

Always make your payments on time
It’s very important to make payments on your transfer on time. These types of accounts generally make prompt payments a condition and if you skip or miss them you could be heavily penalised.

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According to Reserve Bank of Australia figures, Australia’s national credit card balance was $40.4 billion at the end of 2009. That equates to an average of around $3,196 for every cardholder.

With most banks and credit card providers charging interest on credit card balances at anything between ten per cent and twenty per cent, many hundreds of thousands of you will be paying a large amount of interest to your card company. However, with dozens of instant approval balance transfer credit cards in the market, there are ways for you to save money.

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Is a remaider transfer credit card your ticket out of credit card debt? It can be. If you’re having trouble paying off a steep balance and the high interest that goes with it, a balance transfer credit card could be the right solution for you. But before filling out an application, take a few factors into consideration. Educate yourself on the balance transfer process, and you’ll get the most out of your credit card experience. What 0 Balance Transfer Credit Cards Are 0 Balance transfer credit cards have a certain appeal that separates them from other forms of plastic. They offer applicants the chance to shift a balance from a high-interest card to a low-interest one. In fact, most balance transfer cards come with an initial 0% interest period. This means you can make payments that are directly applied toward the balance. As you pay down the debt, you can save hundreds of dollars on interest expense. How to Evaluate Balance Transfer Credit Cards Many balance transfer credit cards appear to be the same, but in reality they vary quite a bit.

Check the following details as you sift through the options: Length of introductory period ? The initial period of no interest may be as short as three months, or as long as fifteen months. If you aim for at least 12 months of 0% interest, you’ll have ample time to pay off the balance. What the 0% APR applies to ? Some balance transfer credit cards offer you 0% APR only on the balance. This means that you will be charged a higher interest rate when you make a purchase. Moreover, all the payments you send in will first be applied to the balance, and then to the purchases. While you pay down the balance, the new purchases and their attached high interest rates will sit and accrue on your statements. Eventually, you could pay more in high interest than you planned on. To avoid this, look for a card that offers 0% APR on both balances and purchases. Or limit the use of your card until you pay off the transferred balance. Check the fees ?

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Michael, 25 years old and working in United States for past one year was on the verge of going bald from trying to figure out the best credit card among the tons of emails that he received almost daily about the “pre approved credit cards”. Chances are that you too maybe going through the same dilemma of choosing the right credit card. As choosing the right credit card is not such an easy task as it looks at the first go, it becomes essential that you know some of the important points before you eventually purchase the best credit card for yourself.

Most of the credit cards, which call themselves as the best credit cards, come with almost the same features, offering more or less the same rate of interest. In such a case, getting the best credit card becomes even more of an ordeal for the buyer. However when the rate of interest is more or less the same, one should look for incentives offered by the various card companies in order to get the best credit card. Incentives and rewards can be of various kinds; depending on them you can opt for the best credit card. For instance you get reward points for every purchase that you make from the credit card and these points are redeemable from certain stores and outlets.

There are three main categories of cards: secured, regular and reward or rebate. Where you fall on the scale depends upon your credit history. If you’re in the process of trying to rebuild your credit, a secured card can help you achieve that. The other categories are differentiated by the types of services they afford. While reward cards generally have great perks, the higher interest rates that they normally charge can be costly if you do not pay your balance in full every month.

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