If you are finding that managing all of your credit card balances is becoming too hard, you should think about consolidating them with a low interest balance transfer and save yourself money at the same time. When done sensibly consolidating your debts with a low interest balance transfer can cut down on your high interest rates.
However before rushing off to fill in an application there are a few things you need to check when choosing your new card to make sure you get the best deal.
1. Initially you should be looking at how long the deal is valid for. Whilst you can find life balance transfers online most of the others will have fixed time periods before the introductory offer expires. You should be looking for a lowest interest rate over the longest period of time, particularly if you carry your debt over from month to month.
2. If you are in a position to pay your debt in full within 6 months one of the 0% interest deals might be best for you. It’s important to remember that when the introductory period expires on these offers the standard interest rate kicks back in.
3. Another point to check for is whether a balance transfer fee will be charged. Some credit providers will waive this but it can be up to 5% of the amount of balance being transferred.
4. You should also check whether an annual fee is payable, again there are cards that don’t have an annual fee, but those that do can range anything between $40 -$250 so it’s worth finding out.
5. One very important point is to know what penalties will be charged for any missed or late payments, and you should also be aware that defaulting on a payment can negate your low interest balance transfer agreement and result in you being reverted to a standard rate of interest.
6. You should avoid making purchases or cash withdrawals on your new card as these are generally not covered by the terms of your low interest balance transfer agreement and you will be charged the full standard interest rate. To compound this any payments you make will be credited toward your transferred debt first, meaning the interest will keep accumulating on these new purchases until such time as your original debt is paid.
A low interest balance transfer card can save you a lot of money when it is used properly, don’t throw away the opportunity to save money by making frivolous purchases.
Nancy Oemi is a personal finance writer. Check her articles for financial tips like low interest balance transfer.
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