subject: Zero balance transfers – five good reasons why to switch your credit card provider [print this page] For those paying high interest rates on credit cards there are currently many offers and stipulations on the market designed to do away with high interest credit debt. One of the most viable ones is a zero balance transfer card. It is by far the most effective in reducing credit liability and with careful planning you will be able to enjoy the benefits of the credit card without loosing your hard earned money in interest paybacks.
By definition zero balance transfer credit card is the one on which no interest is charged on balance transfers for a particular period of time. It is important to distinguish this type of product from another one which falls into a similar category that is a zero purchase credit card. While the former allows you to keep a certain amount of money interest free on your card, the latter allows you to spend with no purchase fees charged at the end of the month. It is also worth noting that many companies will now offer both deals for the same card.
There are two main ways in which zero balance transfer cards can be used. The most common one is to transfer the amount of money on which the interest is paid on onto a card where you don't pay any interest for a certain period. This method is best suited for those who are paying high interest rates on credit cards and finding it hard to repay their balances. This can make a huge difference to some people's finances and can be very well worth doing. Having said that you need to ensure you make your payments on time as late penalty charges can be quite high, thus nullifying the whole purpose of taking a zero balance card in the first place.
Secondly, there's even a way of using a zero balance transfers card to rack up a profit by transferring the money into high-interest bank accounts for the relevant zero interest period on the card. With careful attention to the exact terms and conditions of a particular card this method can yield some interesting results.
When going for a zero interest balance transfer you should look into the various benefits associated with it. Obviously the most desirable zero percent APR would be the one with a long period of offer, so spend your time researching the market. You should also be cautious about any hidden costs and the handling charges attached with the balance transfer deal. Missing your monthly payment can loose you the benefit of 0% interest and you can even end up paying a default rate which might be a lot higher than the typical high street offer.
Zero balance cards can be valuable if used wisely. They have a proven record of helping customers put their finances straight as well as giving them that extra credit boost when needed.
Zero balance transfers five good reasons why to switch your credit card provider
