If you are finding that you have accumulated a number of credit cards and managing your debt is starting to be a bit of a struggle, one method of bringing this back under control is to look at balance transfer card options. However it is important to understand that not all balance transfer credit cards are created equal and it is in your own interests to understand the differences between them.
What does balance transfer mean?
When you transfer your debt from one credit card to another, this is known as a balance transfer. Basically you are intending to use your new card to pay off or reduce the debt from your old card.
What is involved to transfer the debt between cards?
It’s a fairly simple process to transfer credit balance to a new card. Generally you are asked when you make your application for your new card whether you want to transfer a balance from another card. You then provide your old card details to your new card supplier and they will instigate the transfer for you.
How much will a balance transfer cost me?
This can vary between different providers and in many cases no fee is applicable just for the balance transfer, but check the terms being offered. However, you do need to be alert as to whether any other fees such as annual fees are applicable.
Zero % offers
One of the more popular promotions being offered by credit card companies is the zero % interest offer, which can save you quite a lot in interest providing you are able to pay off or considerably reduce your debt during the introductory period. Generally these offers are only very short term such as 3-6 months, and on expiry your interest reverts to the standard rate of the credit card.
Low interest rate offers
If you know that you won’t be able to pay off your debt within the introductory period offered at zero interest, it might be sensible to look at the low interest options available – these are usually for much longer periods from 12-15 months and you can even find some life balance offers available at a low rate if you’re prepared to shop round a bit.
If you use your balance transfer credit card sensibly and select the one most suited to your needs you will find that it is a good strategy to reduce your debt and save yourself considerable interest costs.
