Personal Finances, Financial Advices, Personal Budgeting and more...                                          Articles, tips, advices to help you build your future!


Credit Card Balance Transfer

If you have large balances on your credit cards and a non-negotiable high interest rate, a balance transfer may be your best option for paying off your credit card.  In addition, a balance transfer can get you some other perks through credit card companies that offer rewards.  There are several things to look for when searching for a credit card company to transfer your balance to, and if you are thorough in your search you could make out quite well in the end.

Probably every day you receive an offer in the mail to open a new credit card.  If you have a balance on a card that you are trying to pay off, the last thing you would want to do is open an additional card putting you more in debt.  However, often these card offers also offer an incentive for a balance transfer so look carefully at these if you are looking for a lower interest rate.  If you have a good to very good credit score, you can often get a new credit card with zero percent interest on any balance transfer you may have.  Be careful with these, though, as many of them are only offered for an introductory period which is generally a few months.  However, every so often there are fantastic offers for a balance transfer like the one I received the other day.  After transferring my balance to this new card, I now have zero percent interest on my balance transfer until March of 2008, which is a year and a half.  In addition, I received zero percent interest on any new purchases until March of 2008 as well.  This will be perfect for the holiday season as our family finances tend to be in better shape around January and February, so I can purchase our holiday gifts and then pay them off in those months without any penalty.

Of course, the only way these balance transfers are beneficial to you getting out of debt is if you actually intend to pay them off.  If you simply transfer your balance to a zero percent interest card and let it sit while you continue to make new purchases that you aren’t paying off, you basically are going to be in the same situation you started with.  Although, I have known several people that simply keep opening new accounts and doing a balance transfer again once the introductory zero percent interest offers run out.  This isn’t exactly illegal, but I’m not sure I would recommend it. 


Personal Finance
Investment Tips
Financial Education
Site Map