A 0 balance transfer can be a great way to start rebuilding your credit, but you must be careful to avoid the mistakes many make when going this route. A transfer of this sort may seem like a lot of trouble to get in but the truth is that you are actually making the best financial decision possible. While interest rates are low for these transfers, they will still carry a small amount of interest. But the alternative, which is no interest for several months, is much worse.
So what can you do to minimize the risk of a zero balance transfer? One important thing to remember is that interest is added to your bill at each new balance transfer, meaning that it will take longer to pay off than just one simple charge on your credit card. Another important point to keep in mind is that it is not worth taking out more credit card debt just to get a 0 balance transfer. If you do this then you will end up paying a lot of interest on an already high loan, and you will likely have to extend the term of your credit card agreement. This is another good reason to try to pay off the balance as soon as possible.
0 balance transfer offers vary widely, so take your time and compare the different offers before deciding on the one that is right for you. It’s also a good idea to check online, as there are often a number of comparison sites which will allow you to compare a wide range of deals from a wide range of companies. Look for interest-free terms and conditions as well as any other special offers that could save you money. Most companies will provide an online calculator to help you work out how much you could save, but it is worth getting some additional advice just to be sure.
When taking out a credit card, the main thing you want to remember is that you will have to pay interest on any balance transferred to your new credit card. The best thing to do here is to pay a little more than you normally would, as the interest will be reduced when you pay off the balance. Ideally, you should pay as much as you can afford each month, as once your introductory period is over you will start paying normal interest rates again.
Be careful when applying for a credit card with a 0 balance transfer offer. These offers can sometimes be tempting, but the next time you apply, make sure you look into any fees and charges. Some companies will charge an application fee, some will charge a regular interest fee and others will charge a balance transfer fee when you make a new application. The best way to avoid these fees is to limit the amount you transfer to your new credit card, as these transfers will usually last for a limited amount of time. Also, make sure you read all the terms and conditions so that you know what the interest rate will be for your next month, and how much of a discount you’ll get on the balance transfer.
Balance transfers can also be useful if you want to move a large amount of debt from one credit card to another. For example, if you currently have a high rate credit card, but you’re looking into transferring your balance to a lower rate, do a search online. You should find a number of offers from different companies and compare the deals they are offering. Look for offers that offer a low introductory interest rate, low ongoing interest rates and charges for balance transfers. These are the most valuable balance transfer offers, and the ones you should jump on if you can. These offers can help you save up to two or three thousand dollars in interest payments each year.
However, don’t just jump on the opportunity to transfer your credit card balances immediately. This can have disastrous consequences, as the higher interest rate you have on your balance transfer, the more money you will end up paying in the long run. Instead, wait at least two months before you make a permanent transfer to your new balance transfer card. Then, you will have paid down the balance, had the introductory rate on your interest rate waived and will save even more money in the long run.
If you can’t seem to find any balance transfer offers, start by searching online. Make sure that you read all the terms and conditions of any offers you find, so that you know how much interest will be charged on your new purchases. When you have found the right balance transfer offer, use it to its full advantage by making large purchases online or at your favorite department store. This can really help you save money on interest payments each month.