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Saturday, 16 June 2012

Free Balance Transfer Credit Cards

Human nature is such that the term 'free' can have a drastic effect. We all think that just because something is termed 'free', it comes for free. You must have heard of the saying 'there is no such thing as a free lunch'. It is very much true, especially in the financial world.

Many people can't control themselves while spending money and end up with huge debts. So, what do they do next? They take more loans out knowing very well that they can't repay them. Well, the future can't be much worse than that. This is where free balance transfer credit cards can help get you out of difficulties. If you are someone who has bad debt, then you might want to spend some time reading this article.

Facts that you need to look out for in Free Balance Transfer Credit Cards

So, how do free balance transfer credit cards work? Well, it is quite simple. These credit cards have a small annual fee that you have to pay at the end of every year. You will be pleased to note that these credit cards come with excellent rewards. If you are not going to use your credit card often, then you will want to go for the one that's going to work best for you.

You need to spend a lot of time reading the terms and conditions. According to law, your credit card company must report all the fees that you will be paying. Here are some facts that you need to look out for before deciding on a free balance transfer credit cards.

# Duration

You have to look out for the length of time for which the free transfer will last. Free balance transfers on these credit cards come in periods of 6 months, 12 months, 24 months or even for life.

# Restrictions

You must be aware of restrictions. Many credit card companies will automatically increase your interest rate if you default on your payments.

# Allowable transfer amounts

You also need to know how much you can transfer over. It varies depending upon your bank and on your credit. If your credit is bad, then you might have to settle on a small amount. For those of you with good credit, and who like spending, think twice. Only use the amount necessary.

The best way to find out whether a particular free balance transfer credit card will work for you is to know the pros and cons. Once you are aware of both the good and the bad points, it is easier to make the final decision.

Advantages of Free Balance Transfer Credit Cards
  • Zero percent interest for a limited time: the greatest benefit of this product is that it comes with zero percent interest balance transfers for a limited period of time which usually lasts between 6 to 12 months.
  • Debt consolidation: This product is very useful for those with bad debt. Even though you may not be able to pay off the entire credit card balance before the interest period ends, it reduces your debt considerably.
Disadvantages of Free Balance Transfer Credit Cards

Like all products, free balance transfer credit cards also have their drawbacks. They are as follows:
  • They are only for debt consolidation: you need to have self control while spending money. Remember that this product is useful only for reducing your debts and not for spending.
  • Zero tolerance policy: You should not miss payments as your credit card company may cancel the agreement and up the interest rate. This is something that you should be very careful about.
Since you now know all the facts about free balance transfer credit cards, you can make your decision wisely. This product is very useful for those of you with bad credit and who are facing huge debts. So, act responsibly and get the right free balance transfer credit card to suit your needs.

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