Archive for the ‘Balance Transfers’ Category

            Online information regarding various credit cards and their features abound.  The websites that present these data are there to help the consumers choose the right credit card for them since a lot of people may not know all the different features that credit cards offer.  Of these many features, one of the most important to consumers is the balance transfer scheme that the credit card has.

            When looking at credit card comparison sites, one can be overwhelmed by the flood of facts and figures facing him. Some of these figures may not be immediately understandable by the layman.  To assist in making some of the data understandable, particularly those pertaining to the balance transfer feature of a credit card, I would be presenting some simple facts to assist the tables of comparisons that you will find in the site.

            Balance transfer is a good alternative for someone with a huge credit card loan.  What the consumer needs to do is transfer that loan to another credit card that offers this scheme.  The advantage of transferring the loan balance is mainly to get longer payment terms and getting lower interest rates.  However, not all cards have uniform rates and fees.  It is therefore important to compare first before choosing the card that could answer this need. 

            Balance transfer schemes come in different forms.  There is what is called 0% balance transfer cards, 0% interest on balance transfer cards, low interest rate balance transfer and the lifetime balance transfer credit cards.  I will be elaborating on the latter type of balance transfer.

            Lifetime balance transfer credit cards are those that apply a low interest rate in the loan for a period of more than one year.  There are cards that offer up to five year payment term.  This type of credit card is very ideal to those with large debts who wanted their debt restructured and stretched over a longer period of time.  Despite the name, lifetime balance transfer cards do not offer a lifetime promotional rate.  One or five year period is hardly a lifetime.  However, these lifetime balance transfer cards often apply a very low annual percentage rate (APR) compared to the normal interest rates.  The standard APR for balance transfers is 17.27%.  Translated to monthly interest rate, this is only a mere 1.43% monthly interest compared to the normal credit card interest rates that ranges from 2% to 3.5% monthly.  This is even better than an unsecured loan. 

            Now how does a consumer know if this is the best type of card for him?  Those with existing loans that are starting to become unmanageable; this credit card scheme is for you.  To those who hate transferring their loans from one card to another every time the 0% interest rate is over, then this card is again for you.  For those who do not know which credit cards offer this scheme, the information is available online, with just a click of your fingers.  Just look closely, compare, and you cannot go wrong.

How to Compare Credit Card Balance Transfer Offers

First, let’s go into the terms. A credit card balance transfer means transporting your debt from one card to another in the form of consolidation. Credit card balance transfer is found to be a more easy way to move your debts simply from one card to the other and likewise saving money at that. These offers are very attractive to consumers due to the fact that besides many companies are offering periods which are free of interest for new customers, you can also find lower interest rates with credit card balance transfer offers. But how does this work? Upon applying for a new credit card and it was luckily accepted, you are now eligible to transfer your current or existing balance to your new card issuer. Your new card issuer then has the access to your old card. Of course you are entitled to give to your new issuer the details of that card. And as soon as you are given your new card, you can now enjoy transferring your balances. But you are to watch out for the transfer fees. These are often fees accounted whenever you transfer any transaction. Also, before applying for one, compare credit card balance transfer offers. Here are some points.

• 1. Compare credit card balance transfer offers looking at the size of your balance transfer. Also, focus on the interest rates and fees.
• 2. Compare credit card balance transfer offers according to the terms of interest rate free period indicated. It is however best to avail from the lengthiest interest free period offer.
• 3. When you compare credit card balance transfer offers, be sure to have a rough estimate on the amount of which you are going to spend on the credit card per month and the amount you are likely to pay per month including the interest if there is any.
• 4. Be aware of your existing credit card’s interest rate, annual fees, and benefits.
• 5. Compare credit card transfer offers in terms of miscellaneous fees and the presence of transaction fees.

Research on the many companies that offer credit card balance transfers and compare their advantages as well as their disadvantages, Weigh things first. The property of the credit card must suit your ability to pay and control spending. Be wise to look out for certain misleading points when you have already availed for a credit card balance transfer. Check out each item that you purchase. If there is no 0% rate for those items, then automatically you have to pay for the standard interest rate and any repayments made will be accounted to your balance transfer. Therefore you will have to pay the interest on purchases until you have fully paid for the balance transfer transaction. On the other hand, if you have been accepted for a credit card that has 0% on the entirety of the balance which has been transferred, be careful for the “minimum monthly spend” clause. This is often issued by many credit card companies though. This clause means that your failure to pay for the minimum payables means paying the standard interest rates on all purchases.