Balance_Transfers_-_Buyer_Beware by hashournonos


Balance Transfers - Buyer Beware

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This article describes the pitfals of balance transfers and how to avoid them.

Balance Transfer, Balance Transfers, Credit Card Balance Transfer

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Today there are many credit card companies out there competing for your service, because of this, they all
are finding unique incentives and appealing rewards to get you to apply and use their credit cards. Many of
these are centered on Balance Transfers. However, if you use these incentives to try to prosper you may find
yourself in more debt.

Many credit card companies today are offering 0% balance transfers. This has helped many people that are
overcome with debt. It works very simply. If you have a standing balance on one of your credit cards that
charges high interest rates you can transfer that balance to a credit card that offers 0% on balance transfers.
The new card will give you 0% interest for a set period of time on the balance transfer. Normally, this time
period is for 3 months, 6 months, 9 months, 12 months and sometimes as long as 15 months.

With 0% balance transfers credit card offers, you will be able to save hundreds of dollars in interest charges.
However, you should be aware even with this great opportunity there are pitfalls. When you are reading the
fine print of credit card company, be sure that you are really applying for a credit card that offers 0% on
balance transfers instead of 0% on just purchases. If you get these confused, you could be in a lot of trouble
when you transfer your balance from another card.

In addition, even if you do secure a 0% balance transfers offer you may not receive 0% on any of your
purchases. This would mean that anything you purchase with the card would have the normal interest rate.

As an example, if you $6,000 on credit card at 15%. You decide to do a balance transfer with a credit card
that allows 0% on balance transfers for 6 months. You will save quite a bit of money in interest by
transferring the money to a 0% balance transfer credit card. Without thinking about the consequences, you
make a card purchase and then dutifully pay back the $100. But the $100 will be applied to the $6,000
balance transfer instead of your new purchase. You will then have $5,900 left on your original card balance
with 0% interest and $100 at the 15%.
However, if you pay close attention to the fine print you can find a credit card company that offers 0% on
balance transfers and 0% on all purchases for a certain amount of time. Just remember, that if you do not
pay off the debt prior to the end of introductory special you will then be paying interest on the money once
again. The idea is to use 0% balance transfers and pay off the entire debt prior to the end of your 0% interest
rate. You can even use another card that has a low APR for smaller purchases and only use the 0% balance
transfers for larger card balance transfers.

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