Balance transfers are popular with consumers who are struggling to make their monthly payments. For some, it can feel good to transfer your debt from a high interest card with a high ongoing APR to a card with an introductory 0% APR or even a much lower ongoing APR. However, that s exactly the first step because now your balance is transferred, nothing is clear yet. You still need to work very hard if you hope to pay it down in a timely manner. Here is more information on balance transfers and why they are so risky.
It can be tempting to take the plunge and start the balance transfer process with the best intentions. After all, after paying off that high interest debt for a few months there really should not be much of a difference in your budget. You think you have paid enough interest so you can live without a bunch of annual fees and charges, right? Unfortunately, transferring your debt without taking advantage of the lowest APR balance transfer fee and transferring to an introductory low APR interest rate card could be dangerous to your financial health.
For example, one reason why you need to consider the pros and cons of balance transfers is to see if there are any hidden charges. If you were to simply apply for an introductory 0% APR balance transfer card, some companies will give you an attractive low introductory APR for a short period of time. During this time, your interest rate may increase significantly due to accumulated interest payments. When this happens, the amount of money you would save by paying off your debts immediately instead of over an extended period of time, is almost negligible.
Another reason to consider the pros and cons of balance transfers is to see if there are any exceptions that would allow you to enjoy even more benefits. One of these is the transfer of credit card balances to a new credit card that offers a lower interest rate. Most cards offer a lower introductory interest rate for new purchases or transferred balances. However, do make sure that the new card offers a higher APR than the old card. You don’t want to get yourself in a bind by paying off too many debts with an APR that is much higher than you’re used to paying.
Another advantage to transferring balances to CITI bank is to get instant credit card approvals. A CITI credit card insider advertiser might tell you about some offers that will help you save money on balance transfers. One such offer is CITI’s savings account. With this type of account you can save up to three percent on interest payments when you pay your balance in full each month. This offers good value if you’re able to make large monthly payments every month.
The other thing that makes CITI attractive is that they don’t charge a balance transfer fee for balance transfers for the first six months. They do, however, charge a one card or two card transfer-free period after the introductory rate has ended. Then, at the end of the introductory period they’ll charge a standard interest rate. If you’re not ready to commit to transferring your balances to CITI, start transferring them to another bank as soon as possible.
To find out if CITI will be a good choice for your situation, it is a good idea to look at their annual credit report and find out what kind of score they have. If you have a good credit history with major corporations, the chances of you having problems with CITI are slim to none. However, if your debt history is less than stellar you may find it makes it tough to qualify for a balance transfer. Make sure you compare different banks because they all charge different transfer fees.
Overall, the transfer fee charged by CITI makes transferring high-interest debt harder than it needs to be. If you’re stuck in an unhappy revolving cycle of high-rate cards and paying way over the odds, then transferring to another card with a zero or low transfer fee may be exactly what you need to break out of this cycle. Before making a decision about transferring debt, make sure you know the true cost of transferring your cards. There are plenty of opportunities on the market for low-rate balance transfer cards, but CITI seems to be the worst.