Ben Todd | Apr 16, 2017 | 3
0 Balance Transfer Credit Card
Keep an Eye on Your Mailbox for the Applications
This is an optimal time for making this query. Since a majority of people may have run their current credit cards to the extent of their lines of credit during the holiday season, companies offering credit cards mail out many applications for new cards in January.
Caution should be exercised when considering the special offers made by credit card issuers at the first of the years, especially if you want to transfer balances from other cards. The demographic studies these companies run help them find ways of generating revenue for themselves and not for you.
Find the lowest possible interest rate you can when considering which credit card to apply for. The amount of your monthly payment will increase with higher interest rates. There are some things you should understand and be aware of before applying for a card with a low interest rate. Read the Fine Print
Transferring a large balance with a higher interest rate to a card with lower interest rates may be something you want to consider. However, this interest rate may expire after six months, something typically stated in very small print. Beware of the fine print, or you may end up agreeing to something you don’t have sufficient information about.
Low interest rate credit cards are wonderful, but if your credit history is poor, you will not get one. Getting approval for one of these card, if your credit is bad, just isn’t going to happen. People with excellent credit histories and scores are the consumers targeted for these cards.
“Increasing rates!” is of the pitfalls of credit cards with lower interest rates. They may seem attractive initially, but in fine print, they will state that the advertised rate is only good for a limited period of time.
Payments that are as little as a day late may cause your newly acquired low interest rate to terminate, and you will be charged a default rate that increases your rates up to 20% or higher. You can save money with low interest rates, but there’s no such thing as a free lunch. A Case in Point
A company offers you an application for credit card X. The offer promises the following:
* O% interest on balance transfers for 13 months with a balance transfer fee of 3%
* 0% on purchase for six months
* 15.9 % APR is typical
The card looks like a pretty good deal. Assuming that your interest rate will be 0% for a period of six months, you buy items using the card. You receive your statement and discover you are being charged and interest rate of 15.9%. When you inquire about the reason, the company representative informs you that your payments will be applied to the transfer balance first.
The 0% rate would have held if you had not purchased anything with the card. Since you used the card for purchases, however, the transfer balance must be paid in full before the 0% rate on purchases can begin.
Surprise! All of those details were included on the application form you signed!