subject: Balance transfer credit cards - don't forget these three things [print this page] Balance transfer credit cards - don't forget these three things
It seems slightly naive to say that there are only three things that you need to think about when it comes to transferring a balance to a low interest deal.
It is naive. But, luckily, the title of this article refers not to three things which are the only points that you will need to think about when saving money with this type of credit card offer but the three points that you absolutely should not forget under any circumstances.
They are important points for both when you are doing a credit card comparison and when you're actually using the card since good choices at the stage of comparison - that is, choices which reflect how you'll actually be using the card - will lead to these points being easier to carry out.
Without further ado, then, here is point one: don't take the attitude that it's 0% or nothing.
0% balance transfer credit cards are ideal for certain consumers and for certain types of high interest balances.
Ideally, they'll be used to pay back one fairly small debt over a fixed period of time.
However, when a consumer has a lot of smaller debts in a number of different places or a large debt or they cannot be certain that they will be able to pay off a debt within a strictly fixed period this type of offer may not be suitable.
Each transfer will need a fee to be paid, so many may not be suitable, a large debt that cannot be paid in the interest free period could attract even more interest after that time than if it had simply been left alone and the same goes for those debts which may not be paid off within a strict period.
Low interest life of balance transfer deals, or even keeping the balance where it is, may be a better option in all of the above circumstances.
The second point is this: interest free is not the same as fee free.
Most balance transfer cards now include a percentage fee which you must pay to transfer a balance. These are typically around three percent but they may be more.
The even apply to 'anniversary' transfer deals such as that offered with the post office credit card.
You need to factor in the fee to your calculations and pay it off as soon as you have transferred your balance to the new card.
The third and final point is this: use a balance transfer card just for that.
Later you can use it for purchases or even to collect rewards but when you are paying back a credit card debt it's always safest to stick to the principal of one card, one job.
So, to sum up, first don't take the attitude that it's 0% or nothing.
Second, don't think that interest free and fee free are the same.
Finally, stick to the principal of one card, one job.
