Credit Card Balance Transfers Explained
What is a balance transfer ?
A balance transfer can be explained simply as a balance transfer! When a balance is transferred usually from a credit card, but possible from a bank account or loan to a credit card with a offer interest rate (usually 0%) for a set period. It does not have to be the entire amount. The card receiving the balance will an interest rate for a set term, normally 6 months, but can be 9 months or even a year. Take a look at the current balance transfer deals currently available. This will give you a flavour of the typical kind of deal available.
Should I apply for a balance transfer ?
It is important to remember that a balance transfer does not mean that the debt has gone away. It just means you are not paying interest on it. You will still have to maintain payments.
This may seem obvious but many people do not get this straight in their mind.
The basic criteria for getting a balance transfer is when you regularly have an outstanding balance after making your monthly payments. This is the amount you should look to transfer to another card. This will mean that for the period of the offer you will pay no interest on the balance (provided you make the minimum payments).
You should be very wary of taking up a balance transfer, if your overall debt is increasing. A balance transfer is not a green light to spend more money. The money you save should be used to decrease your debt.
What should I look for in a balance transfer ?
You need to be aware of the following when looking for a balance transfer card
Good things
- Length of offer period.
- Offer Interest Rate.
- The zero or low interest rate charged on the balance.
- Possible transfers from loans and overdrafts.
- On some cards you can transfer from existing loans and overdrafts and still get the offer.
- Cut-off period for the balance transfer offer.
- Hidden Charges on transfers.
- Some banks will charge a handling fee on the balance transfer.
There is usually a cut off point from the account opening when the offer is no longer valid. Be very aware of this otherwise you could end up transferring a balance to a higher rate !!
What about new purchases ?
Unless there is also a 0% interest rate on new purchases then you should avoid making new purchases on a balance transfer card. This is because the banks will look to reduce the balance transfer debt quicker than the new debt. Provided your credit history is reasonable, there is nothing stopping you having several cards for different purposes. A good way is to have a card, which specialises in 0% on new purchases and another card for balance transfers.
What happens when the balance transfer period finishes ?
When the balance transfer offer period finishes the debt will revert to the typical variable APR. The lenders hope at this point that the cardholder will retain the card and some of the debt, so they can then start charging interest and making some money! So take into consideration the low interest rate credit cards. However, there is nothing stopping the disciplined credit card holder from switching to another balance transfer deal and closing the account. The cycle then starts again. Always allow 6 weeks to 8 weeks before the end of the offer period to apply for a new card. This means you can get the balance transferred to the new card before the lender can start charging the higher rate. You have to be organised to do this, but if you are it does work. People who regularly switch balances are know as card tarts.
The Golden Rules
There are three things to look out for with a balance transfer card
- As mentioned previously, the unsuspecting can get caught out when spending on a balance transfer card.
- Maintaining regular payments. If you miss a payment you incur some penalty, so be aware. To be safe set up a direct debit.
- The interest rate applied when the offer period finishes.
Neil Brown is a freelance writer and regular contributor to the credit card sites Choose A Credit Card and Search4 Credit Cards.
 Google News Updated : Mon, 07 Jul 2008 00:55:50 GMT 'Hancock' a signature opening for Smith - Los Angeles Times
Los Angeles Times - The offbeat superhero story brings in $66 million over the holiday weekend, marking the star's eighth straight No. 1. He's hot, but the reviews were not. ‘Hancock’ Powers to the Top of Box Office Will Smith is box office superhero with 'Hancock' Publ.Date : Mon, 07 Jul 2008 00:03:03 GMT Weather Channel Is Sold to NBC and Equity Firms - New York Times New York Times - By MICHAEL J. de la MERCED An investor group led by NBC Universal and two private equity firms clinched a deal for the Weather Channel on Sunday after three weeks of negotiations. NBC Universal, Bain, Blackstone Buy Weather Channel (Update1) NBC and its Partners Announce Deal To Buy Weather Channel and Assets Publ.Date : Sun, 06 Jul 2008 21:48:12 GMT Google, Zen Master of the Market - New York Times
New York Times - By STEVE LOHR Bill Gates, who walked away from full-time work at Microsoft last month, was perhaps the foremost applied economist of the second half of the 20th century. Why Microsoft will win Yahoo Yahoo! re-enters merger talks with Time Warner Publ.Date : Sun, 06 Jul 2008 22:57:50 GMT Obama cites faith as key to change - Boston Globe Boston Globe - Barack Obama called "active faith" an obligation of religious Americans and a chief agent of societal change in a speech yesterday at the national meeting of a black church group. Veterans Group Urges Support to 'Finish the Job' Veterans’ Group Critical of Obama Plans Costly Ad Campaign Publ.Date : Sun, 06 Jul 2008 06:58:31 GMT Bosox, Cubs each put 7 players on All-Star rosters - The Associated Press
The Associated Press - NEW YORK (AP) - Maybe Manny Ramirez, Alfonso Soriano and the rest of the Boston Red Sox and Chicago Cubs should just play their own All-Star game. All-Star rosters revealed Cubs win 7-1 and seven All-Stars; I'd say it was a good day Publ.Date : Mon, 07 Jul 2008 00:00:58 GMT AT&T's Odd iPhone Offer - TechNewsWorld
TechNewsWorld - By Eric Benderoff Some of the details surrounding AT&T's iPhone prices make little sense, writes Eric Benderoff. The company will sell a 3G iPhone with no contract for a $400 premium. iPhone 3G line forms in NYC for a green cause New iPhone Can Decouple From AT&T, for a Price Publ.Date : Sun, 06 Jul 2008 11:04:21 GMT Obama Campaign Criticizes Rival McCain's Economic Proposals - Bloomberg
Bloomberg - By Alison Vekshin July 6 (Bloomberg) -- Democratic presidential candidate Barack Obama's advisers criticized Republican rival John McCain's economic proposals as both candidates prepared to focus on the US economy this week. Obama Advisers Tout Tax Plan That topic we love to hate Publ.Date : Sun, 06 Jul 2008 19:27:55 GMT Amazon Associate Software |
PARLOT::Ebooks, Scripts,
Websites, and more... Are you thinking of buying a house? Do you want... Read More Everywhere we go, the word credit can be found, shining... Read More 2005 marks the year that consumers will be able to... Read More Credit is a funny thing. It can be a useful... Read More When you buy real estate, lenders run all of the... Read More HarassmentHarassment of people in debt by creditors or their agents... Read More There are a whole variety of different types of credit... Read More Many credit card holders sign up for a credit account... Read More Can you establish good business credit if you have bad... Read More In the olden days, about 10 years ago, before the... Read More And some practical advice too!My first credit card?I remember my... Read More Did you know that you could make sure to get... Read More Most businesses want to be able to borrow money when... Read More Finance is a big word for some of us. It's... Read More Joint debts remain joint debts.Both spouses signed a legally binding... Read More If you opened a credit card statement recently and were... Read More Having a better credit score not only represents easier access... Read More The next time you open your credit card statement, take... Read More FREE credit checks or free credit reports. What are they... Read More Debt management programs can be of real help for people... Read More One of the easiest ways to borrow money of a... Read More Have you ever wondered how much money a credit card... Read More Credit Score FactorsThe information contained on our credit reports affect... Read More If you have a bad credit rating, then you might... Read More Secured Credit Card is similar to a prepaid credit card... Read More
Adsense
websites
Ten Steps To Building A Good Credit History
Winning The Credit Game!
Free Credit Report - Really
Good Credit -- Essential for the Prospective Home Buyer
Credit Help for Real Estate Financing: Credit Scores
Harassment of People in Debt by Creditors
Types of Credit Cards
Are you paying higher interest on your credit cards than you think?
Building Good Business Credit After Bad Credit
Applying for Credit Cards Online
My Student Credit Card Adventure
Make Sure Your Credit Report Is Correct to Improve Your Interest Rates And Lower Insurance Premiums
Building Business Credit
Finance - Money, Money
Important Things to Know About Divorce and Credit
Beware of Falling Minimum Payments
Save Money and Lower your Payments by Improving or Repairing Your Credit
Avoiding Credit Card Traps
FREE Credit Report Offer - Careful, It Might Carry Hidden Charges
10 Signs You May Need Credit Counseling
Borrowing on a Credit Card
Beat Credit Card Companies at Their Own Game!
Figuring Out the Ever Nebulous Numbers Called Credit Scores
How to Repair a Bad Credit Rating
Rebuild & Keep Good Credit Ratings by Understanding Your Credit Cards
Affordable and Reliable Web Hosting Starting at $4.49/Month
What is a Credit Card?
A credit card allows you to buy things even though... Read More
How Healthy Is Your Credit
There's only one way to discover the "health" of your... Read More
Dont Fall For A Scheme When Trying To Rebuild Your Credit History
For people with a spotty credit history or bad credit,... Read More
What You Need to Know About Credit Reports
You hear people talk about credit reports all the time... Read More
Credit Worthiness
Credit Worthiness is an important business and personal asset each... Read More
Getting Your Credit Report and Understanding Whats On It
If you intend to apply for a loan, you need... Read More
Get Your Credit Score To Soar In The Twinkling of An Eye
Ever wonder how a creditor decides whether to grant you... Read More
10 Ways of Reducing the Risk of Identity Theft
1- Check your credit report regularly2- Secure personal information in... Read More
Compare Credit Card Offers and Reward Yourself
Here's a simple system on how to pay zero interest... Read More
Credit Cards, Merchant Accounts, and Your Bottomline
Q: I'm opening a gift shop and want to be... Read More
What is the Check 21 Act?
Check 21 is the common name for the Check Clearing... Read More
Credit Enhancements: Seven Tips For Enhancing Business Credit Transactions
What are the avenues available to businesses with weak credit... Read More
Sound Advice For First Time Credit Card Users
If you are just entering the world of credit cards,... Read More
4 Steps You Can Take If Your Online Credit Card Application Has Been Refused
Help! I've Been Turned DownYou received an envelope in the... Read More
Different Types of Credit Cards and Features - Part 1
Just as there are too many credit card companies to... Read More
Credit Cards
Credit cards are a form of unsecured credit. The issuer... Read More
Keep Your Credit History Clean - Remove A Negative Credit Record From Credit Report
The three major credit bureaus, Experian, Equifax and Trans Union... Read More
Credit Repair Companies and Credit Counseling
Let's be crystal clear, right up front. Paying someone to... Read More
Simple Identity Theft Protection
How many of you bank, shop, or transact other business... Read More
Choosing The Credit Card That Is Right For You
Credit cards represent an important part of our financial lives.... Read More
Rewards Cards: Are They Worth It?
Virtually all consumers will have a credit card at some... Read More
What You Need to Know about Debt Negotiation on Credit Cards
Debt negotiation on credit cards is often referred to as... Read More
7 Ways To Squash Identity Theft
It is the scourge of our age: identity theft. Thieves... Read More
To Repair Credit Is No longer Satisfactory - Learn How To Earn A Millionaires Credit In 30 Days...
To repair your bad credit does not necessarily mean that... Read More
Getting Married? What Are The Finance and Credit Implications?
There is a big difference between looking after your own... Read More
Credit |