If you have a large balance on your credit card account that you are struggling to clear, one option you might consider is shifting the debt over to a balance transfer credit card.
These credit cards are specially designed to lighten the load for people with credit card debt, but they are also good for people who simply want to take advantage of low interest rates.
If you are considering a balance transfer credit card, either to save money or clear your debt, there are four crucial things you need to know.
You Will Need to Repay What You Owe Before the Low Interest Period Runs Out.
Balance transfer cards offer a very low or even 0% interest rate, which is what makes them such an attractive option, but these unbelievable rates only last for a limited period, such as 12 months for example.
You need to keep an eye on when the preferential interest rate period runs out and try to pay your debt before then, because the rate will go up again afterwards.
There is also no guarantee that you will be accepted for another balance transfer credit card with a low or 0% rate.
It Isn’t a Good Idea to Make Purchases Using a Balance Transfer Credit Card.
Balance transfer credit cards are a good way to buy yourself some interest-free time whilst you pay off your debt.
They shouldn’t be used to make purchases, as this will only add to your debt and defeat the purpose of using a balance transfer credit card.
Lenders Often charge Fees on Balance Transfers.
Every time you shift your balance from one credit card to another, it is very likely that you will be charged a fee.
You should check what this is before you apply for a credit card designed for balance transfers, as it could end up costing you more than you think.
There Is a Limit On the Amount You Can Transfer to a New Card.
The final very important thing to remember about balance transfer cards is that there is a limit to the amount you can shift.
When you apply for a standard credit card, you are given a credit limit based on your credit rating and the type of card.
The same applies to balance transfer cards, meaning that you can only transfer an amount that is within the credit limit on your new card.
I am very careful with how I use my credit card but, if you’re ever in need of help with managing your money–there are ways to help you through any obstacle.
Have you ever used this method?
Let me know, til then–cheers m’deres!
Nancy Polanco is a freelance journalist, lifestyle content creator, and editor of Whispered Inspirations. She is a proud Mom to Gabby and Michaela and partner and best friend to Darasak. Having worked as part of a health care team for almost a decade, Nancy is happy to be back to her passion. She is a contributor to the Huffington Post, TODAY’s Parents, and an Oprah Magazine Brand Ambassador.