Credit Card Balance Transfers

So we are approaching a new year. This is a great time to work on reducing your credit card debt. One way to do that is to transfer your credit card balance with one of those zero interest promotional card deals. Balance transfer cards allow you to move high-interest credit card debt to a low-interest credit card from a different issuer. The right offer can save you money and inch you closer to a prosperous new year.

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What to know about balance transfer credit cards

You should look for a balance transfer credit card with a lengthy 0% introductory APR period, so that you’ll have a nice long window to pay down debt interest-free. Also, make sure the card doesn’t charge an annual fee.

Balance transfer fees are harder to avoid, unfortunately. You’ll generally be charged 3% to 5% of the amount transferred, although some cards don’t charge this fee as long as you initiate the transfer within a specific timeframe.

You can transfer only as much debt as your credit limit on the new card permits — and generally you won’t know what your limit is until after you’re approved. If you have debt on several credit cards, start by transferring the balance from the card with the highest interest rate.

Remember that the goal of a balance transfer is to save money as you pay off debt — not necessarily to secure a lower monthly payment. We really want to look at the interest rates and the cost of borrowing that money, not the payment itself.

Maximize your promotional period

Once you’re approved for a balance transfer credit card, make a plan to help yourself stay on the debt repayment track.

These tips can help:
•Make payments on time to keep the promotional offer active
•Plan your monthly payment by dividing the amount you’re transferring by the number of months in the promotional period
•Make more than the minimum payment if you can
•Set reminders for your expiration date
•Don’t use the card for purchases or additional transactions, as that can delay your progress

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

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