By Lynette Hill
The most popular option for people who have high interest balances on their credit cards is to switch to balance transfer cards. While this method may sound simple, certain things are needed to be taken into consideration before signing on for a balance transfer credit card. To avoid any nasty surprise, below are four of the things you can expect once you start using your new card:
One: In essence, balance transfer cards allow cardholders to transfer from a high interest card to a low interest card. Note that you are still paying the same balance except, you do it without incurring interest, assuming that you plan to pay everything off within the introductory period.
Two: Did you know that this type of card have another important feature to offer? They enable cardholders to consolidate debt, which may be carried on different cards from various lenders, a single card at a lower interest rate. This means you have the option to simplify the way you are paying your debt each month and allow you to have more control over your credit utilization.
Three: Know that there are certain balance transfer cards that do business with different sources and not just on one card. Aside from balance transfers from credit cards, cardholders can also move vehicle loans, loans for appliance and various other types of balances on their card at no interest charge. To know more, call your card company's customer service to determine if they are offering such services.
Four: Various fees and charges is a way of life for all people who have credit cards. People with balance transfer cards are certainly not an exception. Certain charges will apply once you transfer your balance to another card. This fee is levied as a percentage of the total amount of debt that are being transferred.
For this reason, you must start calculating the cost of transferring any balances you have inclusive of fees and compare them to their interest free charges if you continue to have your balance in your old card and make timely payments for it. If you know you will end up paying more if you transfer your balance, then there is no reason for you to go through the process at all.
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