Balance Transfer Card – Read This Before Applying

If you find yourself swimming in a sea of credit card debt, it may not be much comfort, but you’re by no means there alone. It’s entirely too easy to pile up credit card charges and once there, it can take years, even decades, to get out from under the debt. Just one holiday season of overspending can take its toll for many years to come. The high interest rate charged by most credit card companies is just one reason overcoming credit card debt is so difficult.

Balance transfer cards offer one solution to help you pay off your debts more quickly. They’re just like other credit cards, but you can transfer high interest balances to a lower interest card. From time to time the companies offering balance transfer cards will have specials to entice you to apply, such as 0% interest for a specified length of time.

Before you start jumping for joy, be aware there are things to be considered with a balance transfer card. It requires thoroughly reading all the fine print in their literature or on their ads. Some will charge you extremely high fees for the privilege of transferring to a lower interest rate. Read especially carefully when you see the phrase “Other restrictions may apply.”

If you can’t find an offer of 0% interest, any card with an interest rate lower than the one you’re currently paying will be helpful. Just be sure to find out about any fees beforehand. It may not be in your best interest to transfer a balance if the fees are too high. Fees typically run about 3% of the balance you’re wishing to transfer and some cards will have a cap on the amount they’ll charge, but there are some who do not. This is an important bit of information for you to know before you sign any paperwork.

A word of caution about the 0% offers; in order to use them most efficiently, it’s important for you to be able to pay off your old balance by the time the 0% offer reverts to regular interest rates. They may wind up being even higher than the card you were transferring the balance from. Also, you need to be sure that the balance transfer card you’ll be using has a high enough credit limit to allow you to transfer all the high interest balances you want to eliminate. Again, you must read the fine print carefully.

Many 0% interest offers also include the stipulation that even one late payment can void the introductory offer and your interest rate will jump to whatever their standard rate is. It’s in your best interest to shop around and try to find a balance transfer card with the longest introductory period. Some are as short as 3 months, while others can go on for a year. Typically, those with better credit will be offered a lengthier introductory time.

One last note about balance transfer cards; if you don’t think you’ll be able to pay off your debt in the time allowed by the 0% offer, you may want to consider a life of balance transfer card. These cards work the same way as regular balance transfer cards but they don’t offer 0% interest. Instead they have a much lower rate than standard cards and as long as you pay at least the minimum amount due, you’ll pay that considerably lower interest rate for the lifetime of the balance you transferred.

Using a balance transfer card can be a big help for whittling down your credit card debt, but like any credit card, you must first read the fine print and make payments responsibly.