0%
Balance Transfer Credit Cards: How to Avoid Costly Mistakes & Take
Advantage of a 0% APR
You've seen the offers: 0% balance
transfer, pay no interest for one year. For
those carrying balances on high interest credit cards, the savings
that can be reaped with these balance transfer offers is
tremendous. However, one false move and you'll not only lose the
0% rate, you might also end up paying a higher rate than the one
you previously paid. Credit card issuers call it the default rate,
and it can range up to 29.99% or more, a far cry from 0%.
How can a 0% balance transfer
dream turn into a 29.99% nightmare? Its not as uncommon as we'd
like to think. In fact, it could happen with only one late
payment. Yes, missing a payment constitutes default in most
contracts, bringing with it the horrific default rates attached to
most, if not all credit cards. Luckily, many credit cards won't
throw the book at you if you simply miss one payment by a few
days. If your credit is questionable, however, one late payment
could be enough to trigger the default rate.
Fortunately, there are easy ways
to prevent this. One very effective, time-saving method available
is automatic payment. You can schedule a monthly payment directly
from your bank account to your credit card, ensuring payment is
received on time. The next easy way to maintain your 0% interest
rate is to simply pay your bill when it arrives. E-mail bill
notifications are also a great way to keep you up to speed with
payments.
The money a 0% APR can save you
over the course of 12-15 months greatly outweighs the burden of
paying a bill on time. Besides, defaulting on a high interest
credit card will also cause your rate to hit the ceiling, and
probably much quicker than it would with a new 0% balance transfer
credit card. It is never a good idea to miss a credit card payment
for this reason alone, and many people seek 0% balance transfers
because they have been unfairly hit with a default rate by their
current credit card issuer.
Credit card companies give you
the opportunity to save with 0% interest rates for up to 15 months
because they want you to use their card. Not only do they make
money every time your card is swiped for a purchase, they also
expect to make money on your balance once the 0% APR expires. The
0% offer works for credit card companies because it brings in new
customers. More importantly, however, the 0% offer works for you
because it can save you a substantial amount of money on interest
during the introductory term.
Just how much you can save will
vary. For example, transferring a $2,000 balance from a 13.99%
credit card to a 0% balance transfer credit card offers you the
opportunity to save over $200 in interest (assuming no additional
usage during the year). Not too bad, but small change compared to
the $1200 or more you can save by transferring $10,000 to a 0%
rate.
Everyone with decent credit and a
revolving balance should take advantage of 0% interest balance
transfers to help reduce the burden of paying off credit card
debt. Why pay to borrow money when someone will lend it to you for
free? It simply doesn't make sense. With credit card issuers like
Citibank, American Express, Chase, Discover, HSBC, and
others fighting to gain you as a customer by offering a 0% rate,
there has never been a better time to cash in on the hundreds to
thousands of dollars these companies will allow you to save just
for transferring a balance to one of their credit cards. You
can compare current 0 APR Balance
Transfer credit card offers at its respective page in the
directory. Once you've found the right card, simply
click apply to start saving money on interest. |
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