Finance Tips

If you are in credit card debt and suffering from high monthly interest charges, zero interest credit cards are an easily accessible solution. Many credit card providers offer 0 balance transfer credit cards to encourage people to transfer their credit card balances. This is a popular and successful marketing technique which you can take advantage of. These credit cards offer an interest free period of usually between three to fifteen months. However, once this period is over you will have to pay normal interest charges. Thus, for the cost of the interest free period, these lenders have purchased a customer. That is, if you play the game their way. You do not, however, have to do this.

There is nothing to stop you playing the credit card transfer game your own way. The goal of your credit card provider is to profit from your indebtedness. Your goal is to keep as much of your own money as possible and if you’re smart, to become debt free and financially strong. You can use 0 balance transfer credit cards to do just that.

The first step to freedom from high credit card costs is to find an interest free offer for credit card balance transfers. Choose a credit card with the lowest balance transfer fees and the longest interest free period. Twelve months or more is best. As you near the end of this twelve month period, start to compare other 0 balance transfer credit cards with low upfront costs and decent introductory periods. Once you decide on the best offer, apply to transfer the balance of your current card to the new one. In this way, you will be able to continue to benefit from a zero interest rate.

This simple idea can save you thousands of dollars in interest charges. However, even though the idea is simple it can be difficult to wade through all the offers in the marketplace and go through the application processes. The easiest and quickest way to implement this financial strategy is to take advantage of an established online credit card transfer service. A professional service such as this will already have done the initial research and selection for you so that you only have to consider a smaller range of the best 0 balance transfer credit cards. These services will also generally provide an online application process to make things even easier.

However, the best of these professional sites will also offer a reminder service so that you don’t forget that your interest free period is coming to an end. An alert will be sent to give you enough time to transfer your balance to another zero interest card. This service will support your decision to continue to move your balance to a new credit card so that you never have to pay interest. There is no doubt that the busyness of life can easily get in the way, causing us to forget our good intentions. A reminder service can give you a prod to act quickly in your own best financial self interest.

Introductory, interest free credit cards offer a user friendly way out of the credit card trap. As long as you remember to transfer your balance to another of the many available 0 balance transfer credit cards before the introductory period expires, you will be able to gain your financial equilibrium easily.

A 0% Balance Transfer Credit Card usually refers to a credit card that offers a new user or new cardholder a 0% interest rate for the first six to twelve months after first using the card. Usually, the 0% interest rate is a “teaser” rate that is used to persuade people to use or avail a certain credit card. This comes after a credit card holder transfers balances from one or more unpaid credit cards to the current card. Then the creditor has to pay for those debts using the new card.

Issuers like banks, generally charge balance transfer fees to reimburse the costs they incurred in handling the transfer of the unpaid debt to the current credit card account.

To take advantage of the 0% interest rate that this type of credit card offers, a cardholder must try to transfer debt balances to his current card, then paying for them as quickly as possible. Issuers of this type of card typically offer 0% interest rates on periodical payments for up to twelve months after first using this credit card.

Things to Take Note Of:

Applicants for balance transfer cards should take note of the following facts regarding this type of credit card:

1. Some card issuers disallow the transfer of debt balances from high interest accounts to this type of card during the introductory 0% interest rate offer period.

2. A handful of issuers of this card charge high balance transfer fees that cost as much as $50.

3. If you incur a late payment for even a single payment period, several issuers automatically charge cardholders with very high penalties. What’s worse, they could immediately revoke the 0% interest rate privilege and change your card to a variable annual percentage rate (APR) card just for one late payment.

4. Issuers may charge the credit card holder very high interest rates right after the introductory offer period expires.

How to be a Responsible Balance Transfer Card Holder

If you want to take advantage of the short-term introductory benefits of a 0% interest balance transfer credit card, take note these simple tips:

1. Do not apply for this card if you are going to transfer small amounts or a zero balance debt for a previous account.

2. Make sure you choose a credit limit that suits your needs and at the same time complements your current financial status. The issuer conducts credit investigations to determine your ability to pay and the credit limit that you can handle.

3. Understand the long-term details of credit. Make sure that you can handle the interest rate and rigidity of the payment scheme after the introductory 0% interest rate period.

4. Quickly pay for the balances during the introductory 0% interest period. If you are going to take advantage of the 0% interest rate, make sure that you can pay for the balances during the introductory period. This is especially needed whenever a credit card holder transfers a balance from a previously high interest card.

5. Do not transfer large balances to your 0% credit card if you cannot pay for them before the end of introductory period. Failure to pay for the balance would result in the cardholder having a much larger amount to pay for compared to the original balance he wanted to eliminate.

Make sure you understand the costs you will have to incur and deal with using your new 0% balance transfer credit card. Read the fine print in the card’s credit terms to make sure you will not get into financial trouble.

0% balance transfer credit cards are a type of interest free credit card which allow you to pay zero interest on your debt for a fixed period of time, meaning it can be a cheap way to pay off debts if you can navigate the system to your benefit. However, while these credit cards can be very useful in certain circumstances, if you’re not careful they could equally lose you money. Here are the dos and don’ts of 0% balance transfer cards.

DO: Compare offers

Different providers offer different terms on their 0% balance transfer credit cards. Shop around for longer interest free repayment periods, lower interest rates once the offer is over and lower transfer fees where possible. It might not seem important right now, since you will not be paying any interest at first, but these factors could save you hundreds of pounds later on if you find yourself unable to pay off the balance within the promotional interest free period.

DON’T: Ignore transfer fees

Transfer fees are now standard on the majority of 0% balance transfer cards. This is because providers want to avoid customers taking up the interest free offer, failing to pay off their debt within the promotional and simply switching card supplier each time the interest free offer expires. Balance transfer fees vary from card to card but are usually around 2.5% to 3% of the total balance owed. Look for the lowest balance transfer fees possible when comparing credit cards.

DO: Be realistic

Be completely honest with yourself about how long it will take you to pay off your debt. If you know you can realistically pay it off within the interest free period, it could well be a good idea. If you’re not sure then you need to be wary of 0% balance transfer credit cards – leaving your debt for longer than the interest free period could costs you high interest repayments, the average interest on credit cards being around 17.5% in the UK. If you run out of time and choose to move your debt, meanwhile, you may be met with the alternative cost of the card’s transfer fee. If you don’t really know how long it will take to pay off your debts, a lifetime balance credit card might be more appropriate.

DON’T: Make purchases

Unless your 0% balance transfer credit card terms specify that the card is 0% on purchases, the likelihood is that you will have to pay very high interest on any purchases you make with the card. Even if the card does specify ’0% on purchases’, many customers don’t fully understand the conditions attached to this. Certain purchases could still carry high interest rates, as could instant cash transactions, such as cash withdrawals, so people often inadvertently trigger these expenses simply due to not understanding the terms and conditions attached. Also, making any purchases will increase the overall debt and make it harder to pay off the balance before the end of the promotional interest free period.

Banks are fairly imaginative people. I can give it to them for thinking new ways to entice you to keep spending despite these hard times. Now, they have come up with these new 0 balance transfer credit cards offers with enticing features to match.

So, exactly what are these new 0 balance transfer credit cards offers flooding the market nowadays? They are new ways of luring and hooking new customers with excellent histories. Those with low bank ratings need not apply for these new ones at all. They will surely get turned down as issuers are not entirely stupid people.

Since the economy has turned upside down lately with no relief in sight for the near future, people who still have managed to maintain their bank payments with no late or missed payments is getting fewer. Many people have fallen in their standings and issuers are in a rush to pirate the existing good clients away from their present issuers.

One way to do that is to offer these 0 balance transfer credit cards, the zero there meaning zero interest for the first 12 months from date of approval. It will allow you to switch your existing high-interest outstanding payment from the present account to another bank issuer. That switch alone will save you a bundle if you are carrying a substantial payment monthly.

Even counting the one-time service fees (capped at US$35 or US$50 depending on the issuer) or 3% of the transferred amount (whichever is lower), it still makes sense on your part to effect the switch. This is because some 0 balance transfer credit cards also allow you to make purchases for the first six months at no purchases. The catch is that you need to closely monitor all your monthly due dates so as not to miss or make a single late payment.

If you even make one late payment that zero interest offers evaporates quickly. You are highlighted as a high-risk visa holder who can default anytime. The new interest rate could even be higher than what your previous charges were.

People who keep changing their visa accounts are called “hoppers” who pose a big risk to issuers. These types of people are in continual danger of defaulting because they have already maxed out their existing visa limits.

Using 0 balance transfer credit cards features can give you significant relief from the usual money woes. This is only a temporary solution at best so you need to find ways to cut your expenses or increase your income sources or both at the same time. 0 Balance transfer credit cards allow you to consolidate all debts into only one account.

Frankly speaking the system “buy now pay later” often results in most of us getting caught in a situation with our credit card bills that we find difficult to manage. The temptation to buy and knowing that you do not have to pay instantly is a combination that most judicious spenders find difficult to resist.

To top it all the moment you turn 18 you start getting attractive offers from the biggest players in the credit card industry. Everyone in that age wants a credit card to get the feeling of having attained maturity. Most of the teenagers cannot resist getting a credit especially when it seems so easy. It is this weakness of human nature that the credit card companies try to cash upon.

This, however, is a snare of sorts that you have to beware off. In no time you will see that you have accumulated a credit card debt and are caught in a trap, where you are neither able to pay nor afford to let your credit rating be spoiled.

At the same time there is a deluge of offers which can, to a great extent, extricate you from such awkward situations. One of these offers is that of a “0 on balance transfers”. These allow you to transfer your credit card payable amount on your previous card to the new card at 0 percent interest. The 0 in these offers is almost too tempting to be ignored. The important thing, however, is to look for the fine print and see as to how long the zero percentage will last. The first thing to watch on such offers is to see whether it is a fixed APR or not. If it is not, then be prepared for an interest shoot up after the offer expires. Most likely it is an offer for a limited period of time, say, one year at the most.

The second thing to look for is for is as to how large a balance transfer will be allowed. Maybe your debt is huge and the offer is not valid in your case.

The “0 on balance transfer” offers not only appear to be but are actually beneficial in case you can take some time off to go through the offer properly and not get lured only by the 0 percentage that the offer states. Handled intelligently, such “0 balance transfer” helps in reducing the amount of interest payable by you every month.

The World Wide Web is a very convenient place to look for offers of “0 on balance transfer” offers. All it requires is to punch “0 on balance transfers” on your search engine and it will give you a view of myriads of such offers floating around and that too by reputable companies. Compare and sift through the offers, not forgetting to read the finer print. If you keep in mind what to be beware of, most likely you will be able to locate one that will benefit you and save you a lot of money too.