I’m sure you’ve received tons of credit card offers from companies offering balance transfer credit cards. If you’ve decided it might be a good idea to consolidate your debt and accept one of these offers, you should carry out a credit card comparison and take heed to the following guide:
• Fool-proof Yourself Against Teaser Rates Tricks
If an asterisk follows a 0% offer, that means there’s a catch somewhere. Check the bottom section of the page for an explanation, because you might find out that 0% does not really mean 0% and is just another marketing ploy to make you think otherwise. There are balance transfer credit cards advertising 0% rates that in fact only apply to a minimal fixed amount or to the first balance transfer transactions. Since most transfers involve many different balances from multiple account transfers, the offer may turn out to be less attractive than you initially thought.
• Be Careful with Additional Purchases
Many balance transfer credit cards do not include additional purchases in the 0% introductory offer. Also, payments are usually applied first to the balance transferred. This means that your additional purchases may incur hefty interest before your balance transfer is completely paid off.
• Be Ready to Pay the Regular Rate
Teaser rates are temporary. They don’t usually last more than 12 months.
So be careful when choosing credit cards because after the introductory offer expires you might be left to contend with an exorbitant interest rate.
• Prepare for the Expiration of the Introductory Rate
It is best to know and prepare for the expiration of the introductory rate. This is especially true if you are not willing to pay the regular rate that your card issuer is charging. Shop for better deals a few months in advance. This way you’ll have more time to prepare and ensure that you get a better deal before the expiration date. Be careful not to abuse this practice though, because credit card issuers are bound to notice your 0% rate credit card hopping and it may cause adverse consequences to your credit.
• Avoid Hefty Late Payment Fees
Balance transfer credit cards issuers may give you a respite with their 0% introductory offer but they may take you by surprise by their inflated late payment fees. Make sure to know beforehand how much late payment fees or other penalty fees will be to avoid trouble later. You may be paying more than your 0% balance transfer is worth.
