Credit Cards For Bad Credit - 3 Balance Transfer Secrets You Need To Know

It's not uncommon to see applications in the mail from credit cards for bad credit offering low interest if you'll transfer balances from another card

. You might be tempted to take advantage of the fantastic offer, but before you do, it's important to research the fine print of the secured cards terms and conditions. As the competition among card issuers increases, many have raised their fees and modified their terms and conditions.

Take the time to study the cards balance transfer terms and conditions. Many card companies structure their payments policies to yield the most profit. For example, let's say you're given a 0% APR on transferred balances and a 12% APR on new purchases. In order to maximize it's profits, the bank will apply your payments to the transferred balance first because it isn't receiving interest from the 0% APR. Meanwhile, it profits by receiving interest from your new purchases.

Let's study three simple solutions to minimize your balance transfer fees:

1) Separate Your Purchases

One strategy to cut your fees is to make all new purchases on another card. Reserve the new card only for transferring your balance for the 0% APR. Continue to make the minimum payments as long as the card stays 0% APR and use the rest of your money to pay off cards and loans with higher interest.

You could also set aside the leftover funds to pay off the balance when the secured cards APR rate goes up.

2) Beware of Transferring Old Debt

There will be instances when you'll come across credit cards for bad credit that will entice you to transfer your really old debt to a low interest secured card. The bank's underlying motive here is to get you to pay back your old debt. If your debt is old enough to pass your state's statute of limitations, you may not be legally liable to pay it. Check your state's statute of limitations before applying. If you've been tricked into renewing an old debt, call the card company and tell them to cancel the card and remove the debt from it. Explain you were never informed you would be paying back an old debt.

3) Study A Card's Transfer Fees

If you see a great 0% APR on balance transfers, be sure to check the terms and conditions for any balance transfer fee. Most secured cards impose a balance transfer fee. The fee can be a flat amount or based on a percentage of the transferred balance. To prevent any surprises, be sure to study the terms and conditions of credit cards for bad credit before you transfer.

by: Bobby Tan

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