Saturday, 2 June 2012

Credit Cards 0 Balance Transfer

0% balance transfer credit cards can be extremely appealing if you're planning on consolidating your credit card debt. You'll pay no interest on your outstanding balances for the duration of the special rate offer - usually six months.

Instead of paying exorbitant rates, as you may be doing right now with your current cards, you can take advantage of a 0% balance transfer offer and pay no interest at all for that introductory period.

Effectively, this will mean every cent of your repayments will be reducing your card debt until that low rate expires and reverts to the higher standard purchase interest rate on that card.

0% Balance Transfer Credit Cards Don't Always Mean $0 Fees

Before you apply for your balance transfer card, take a bit of time to check what other fees may apply to your account. Even though you might be paying no interest, you may find your account has a balance transfer fee applied, or even an annual card account fee.

Shop around until you find a deal that offers low rates as well as low fees, or you could find the fees can add onto the debt you're working hard to repay.

What Happens After the Introductory Period?

While 0% Balance transfer credit card offers might sound great during the introductory term, what happens when it ends?

You need to know what the rate will revert to after the no interest promotional rate expires. For example, you might find that the rate will go up to as high as 20% after that first six months. If you still have any outstanding balance remaining, it will attract the much higher rate until it's repaid.

If you shop around, you can often find some credit card providers offering 0% balance deals that also offer very competitive rates on purchases too. It's the purchase interest rate that will accrue on your balance once the low rate period ends, so watch for this.

Longer Balance Transfer Offers

If you are seriously considering applying for a 0% balance transfer credit card, then you should take a bit of time to figure out whether you'll be able to repay your balance within that first six months.

Simply divide the amount you owe by 6 and this will tell you how much you'll need to pay each month to get rid of that debt before the high rate kicks in.

If you really don't think you'll be able to afford that amount per month, perhaps consider shopping around for a longer term offer, such as 12 months or 15 months instead. This will give you time to pay off your card debt while the rates are still very low.

See also to looking for great credit card offers.

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