Opening a new credit card apparently seems to be a smart idea, especially when mounting credit card debt are in front. Anyhow in one condition, it makes sense and saves you a lot of money. This particular exception is a credit card balance transfer and it’s available to anyone with a mailbox and social security number.
Today, credit cards are the big businesses and companies are making fortune off finance charges. Most of credit cards are having 16% annual percentage rate. Such high interest rate makes it really hard to pay down the credit, because interest is charged consistently and adding to the principle. As there are so many credit card companies, and are anxiously waiting for your credit transfer and grow their businesses, this is for what the credit transfer was invented.
There are so many companies that offer free balance transfers from old cards in order to attract consumers to their credit card. When the money is safely transferred and owed to a new company, you are often provided a grace period where they charge far less on the transferred balance. It’s possible then you can have zero, one, or two percent interest. Most of time, this initial rate lasts about six to twelve months after the balance transfer takes place.
For an intelligent consumer this is perfect method to reduce a credit card debt. Because then a person is free to pay down the balance on a credit card without incurring interest charges. You can use this strategy for opening a new account that offers a balance transfer when the old one expires. Transfer all of your balance t the new card and begin a new grace period of low or non-existent finance charges. Make it sure that you close your old account before the balance transfer.
If you want balance transfer work for you perfectly, your attention is required. Sometimes there is fine print attached with hidden charges. You must know the following points before balance transfer:
Check out if the bank charges a transfer fee
Make it sure that there is a cap on the amount
No high annual fee
No joining fee
Remember that credit card companies are already getting your business, so never let them take the upper hand in a balance transfer.