An offer to get a new credit card with a balance transfer from your old card may seem like a tempting idea. While it has its many advantages, it can work to your disadvantage, costing you a lot of money if you do not bear some important things in mind. Before accepting any offer for a credit card transfer, ask these questions:
1. Will there be an introductory interest rate?
Many companies have credit card offers where if you accept a balance transfer you receive a low or 0% introductory interest rate on the balance transferred. This will then cause a reduction or elimination of any monthly charges on the balance you transferred, making easier for you to eliminate your debt.
2. What is length of the introductory period?
Normally the introductory time period is anywhere between 6 – 12 months. Of course the longer period is desired as this give you more time to reduce your debt without the charges.
3. Will the introductory interest rate apply to purchases, or just the balance transferred or both?
Most credit card companies will have an interest rate for the balance transferred which is the introductory rate, and another for any purchases made. Some even have a third for cash advances. If the new card has different rates, be clear as to what the introductory rate will and the regular will apply to.
4. Will the introductory rate apply to you?
Not because a 0 balance transfer is being advertised means that you will qualify for that rate. The rate you are given will be based on your credit history, and hence may even be higher than you suspected due to poor credit.
5. Will there be any fees for balance transfer?
Even though you have a 0% introductory rate, you may still be required to pay a fee for transferring your balance. This may be a percentage of the amount be transferred or a fixed fee.
6. What will be the APR after the introductory rate?
Even though you may be getting a good introductory rate, you still want a very low APR for life after the introductory period. Also find out if a different APR will be charged on any balance you may have left and purchases made. Use the fact that APR will increase to motivate you to pay off your balance quickly.
1. Will there be an introductory interest rate?
Many companies have credit card offers where if you accept a balance transfer you receive a low or 0% introductory interest rate on the balance transferred. This will then cause a reduction or elimination of any monthly charges on the balance you transferred, making easier for you to eliminate your debt.
2. What is length of the introductory period?
Normally the introductory time period is anywhere between 6 – 12 months. Of course the longer period is desired as this give you more time to reduce your debt without the charges.
3. Will the introductory interest rate apply to purchases, or just the balance transferred or both?
Most credit card companies will have an interest rate for the balance transferred which is the introductory rate, and another for any purchases made. Some even have a third for cash advances. If the new card has different rates, be clear as to what the introductory rate will and the regular will apply to.
4. Will the introductory rate apply to you?
Not because a 0 balance transfer is being advertised means that you will qualify for that rate. The rate you are given will be based on your credit history, and hence may even be higher than you suspected due to poor credit.
5. Will there be any fees for balance transfer?
Even though you have a 0% introductory rate, you may still be required to pay a fee for transferring your balance. This may be a percentage of the amount be transferred or a fixed fee.
6. What will be the APR after the introductory rate?
Even though you may be getting a good introductory rate, you still want a very low APR for life after the introductory period. Also find out if a different APR will be charged on any balance you may have left and purchases made. Use the fact that APR will increase to motivate you to pay off your balance quickly.
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