Balance Transfer Cards – Best Way to Wipe Off Credit Debt
The main purpose of a balance transfer card is to shift existing credit debt to another card that offers 0% interest for a fixed period of time. This way one can spread the debt repayment for a longer period without paying the interest that comes with a standard credit card. This saves you the cost of high interest. So, if you are paying high interest on an existing debt then it’s better to go for a balance transfer card.
This way, balance transfer cards are the finest way to manage debts, which can be from more than one card. It also is a way to pay off debts without high interest rates and within a long period of time. Of course, you will have to pay the transfer fees which is equal to 2.5% to 3% of the amount that is transferred. Once, this is paid you will have ample time to return your debt at 0% interest.
Tips to manage the debt with balance transfer credit cards:
You have to pay it within the interest free period of the balance transfer card. If this period ends then you will have to pay 18% or more interest on the balance amount. So, it is better to make repayments early. Try to finish it by the end of the interest free period.
Go for direct debit: You can set up a direct debit. Divide the total amount over the number of months of 0% interest rate. Find the monthly amount and set up a direct debit of that much money to be paid to the credit card provider automatically. This method can manage debt repayment without any burden.
Keep an eye on the fees: The transfer fees is normally 2.5 – 3 percent of the amount transferred. However, a few companies do give it at a lower rate but with a much shorter 0% interest free period. So, if you can manage to repay the debt within a short time, let’s say 6 months then you can save on the extra transfer fees too. Think on those lines and plan the payment.
Speak to the provider: Convey your problem to your credit card provider. Inform them about a balance transfer deal. If they don’t want to lose you then they may give you an advantage of a similar deal for their current customers. This will solve your problem and save you from extra paperwork.
Cover the minimum repayment: All types of credit cards including balance transfer cards would want you to cover your minimum repayment. If that is not done, then by the end of the interest free period you will be loaded with paying a much higher interest on the balance. So, the time spent on getting a money transfer card will go in vain.
You can try all these options to clear your debt. However, few words of caution includes the fact that providers normally do not offer balance transfer cards to people with a bad credit history. Again, you cannot buy the balance transfer card of the same bank that has offered you the credit card. So, keep a clean credit history and buy the new card from another provider.
Applying to many credit providers will also show a weak financial position and so, companies might be reluctant to offer you the balance transfer card. To find which provider is best for balance transfer, use FreePriceCompare.com’s credit card comparison service. You can also call us on 02034757476.