Low Interest Balance Transfer Credit Cards

You might have encountered several credit card issuers offering low interest balance transfer credit cards promising you that what they give you is the answer you have been waiting for so long.  They boast about offering the lowest of interests, which some can get as low as 0%, but in reality they are merely arrangements or promotions to attract new customers. This of course is not totally a sham but remember there is no such thing as a free lunch. So before we can say whether such transaction is good or bad, we have to know the what, how and why:

Back to Basics

A credit card balance transfer, as its name suggests, is a type of credit card deal wherein you move or transfer the balance of one of your credit cards to another. What for? Perhaps the most obvious reason and probably the one most bank on is the prospect of an approach to cut down on costs, particularly on the interest charges you pay.

You see, credit cards are a big business today and most credit companies make big money out of the finance charges you pay. Interests can climb to as high as 16% and because this interest is charged consistently, some might find it difficult to pay off. So in an effort to lure people who suffer from this setup, many companies offer balance transfer for credit cards at low interests. And to make the offer more attractive, these deals come with incentives, benefits and grace periods during which you get to be charged with rates far lesser than your old credit card.

What’s In It for Me?

 If you are savvy enough, this is a perfect opportunity to reduce your credit card debt. With zero or lesser interest charges, you get to pay more for the balance without worrying about being burdened by the high costs of interest. Plus with the right strategy, you can live off opening new accounts as the others expire; so called a credit card hopping strategy, that could save you quite a lot of money over the years.

How Do I Go About It?

Before you sign up for a go for a new balance transfer credit card, make sure that you get a fairly good deal. Balance transfer credit cards have quite a handful of rates you need to compare and consider so you can arrive at the best decision. Compare the rates of your prospect and your current credit card. You also need to know if there are some balance transfer fees included just in case you decide to apply for it. And as a precaution against future tangles you might end up in, make sure qualify for the promotional rate or have the available credit and resources to pay off that new liability or else you might end up paying for more.

Debt is inevitable and incurring it may just be part of our lives. Balance transfer credit cards that promise low interest may just be the solution to your perennial debt dilemmas but know that although it provides you an opportunity to avoid paying your credit card bills, there still lies the probability that it could go the other way. After all when you think something is too good to be true, then it probably is.

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