About Credit Card Balance Transfers

Do you have a looming credit card debt? Does it feel like, no matter how hard to try, you can never pay off the credit card balance? Do you wish you’re annual interest rate would go down to give you a fair chance? Well, if you are like most of us, then you will have answered yes to at least one of the above questions.

Paying off that credit card debt may seem impossible, but there is something you can do. You can open another credit card account with a different bank. It may sound like the last thing you should be doing but it’s actually a smart move. And the reason is because of credit card balance transfers.

So what is a credit card balance transfer? Essentially, a credit card balance transfer is a transfer of your credit card balance from one bank to another. It’s quick, easy and will save you high interest rates for a certain amount of time.

Because the credit card industry is such a massive business, many banks are desperate for your business. They want your business so bad that they will often offer you a free or low balance transfer just to get you to switch. Sometimes banks will also offer you loyalty points or some other incentive to get you to make the switch.

Because most banks charge up to 25 per cent annual percentage interest on your credit card, this will save you a large amount of money of your interest payments. Instead of paying the minimum but feeling like you haven’t got anywhere because of the interest fee, you can start again from scratch. Banks will offer you a free balance transfer and low interest rate for an introductory period, often 6-12 months if you switch to their bank. So, instead of paying a fee of 16 per cent on your credit card debt, you could be paying 0 per cent for six months. With no interest, it just might be possible to get your credit card debt down to nothing. Another great thing about balance transfers is that they are extremely fast and easy. Banks will usually give these to anyone with an address. Furthermore, the process can be completed in a matter of hours. It’s really that simple.

However, there are certain things to must consider when deciding if a balance transfer is right for you and your ominous debt. You must be sure to close your old account when transferring your funds. This ensures you won’t continue to pay interest. Furthermore, be sure to read all the fine print. Some credit card companies charge a high annual fee; others have a joining fee. These are things to keep in mind when transferring your balance.

If you’re like most of us, and your credit card debt doesn’t seem to be decreasing, then try a balance transfer. In the end it could save you a small fortune.

Write to Julie Williams at julie@creditdonkey.com