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Making the most of Balance Transfer Information
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Balance
Transfer Tips for Credit Cards |
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USING BALANCE TRANSFERS
Using balance
transfer to your advantage.
In today’s market, we are overwhelmed
by the number of credit cards available, every company
from banks, football teams, charities, high street
stores even down to the petrol supplier seems to offer
them, all claiming their card is the one for you.
Although the free
availability of credit cards is often seen as
a bad thing and encouraging yet more debt problems
than people have already, one side effect has emerged
that can actually help, or at least ease, your finance
problems – competition.
Credit card companies have some serious
competition and ways to attract you to their particular
card have had to be devised such as low interest rates,
cash back, free insurance the list seems endless.
But perhaps the offer that can be used best to actually
help you with your problems is the balance transfer.
Companies appear to be extremely generous
in allowing you to transfer your debt to them and
waiving interest but the reality is, they just want
the interest for themselves and a way for them to
achieve this is to entice you over by offering a zero
or low interest rate. The minimum payment that has
to be made barely scrapes the surface and when the
interest free period runs out, you have lots of debt
left and they get lots of your cash in the form of
interest payments.
How to use this to your advantage:
2/ Determine how much you will need to pay off
each month so that you clear the debt on the last
payment in the 0% grace period. If this is easier
said that done, try to pay off as much as you feel
you can handle and look to transferring the remaining
balance onto a different card which is also offering
special deals when the current one finishes.
3/ Make sure you ALWAYS pay the minimum amount,
failure to do this can blow the whole deal and you’ll
find the interest back in your life and potentially
a record stored in a dungeon somewhere preventing
you getting another card. Set up a standing order
immediately you get the card to pay the minimum
amount so you don’t have to worry about meeting
this and top up every month via online banking or
at any bank with the paying in slip up to the required
amount.
4/ If you do have to use the card for new purchases,
think about using a card offering 0% interest on
new purchase too (a summary of up-to-date offers
for purchase can be found here: www.1st-uk-credit-cards.co.uk/summary_by_Transfer_Rate
) but be careful to pick a card that is offering
a months interest free period on new purchases.
There are many cards that appear quite cheap, but
reading the small print shows they will charge you
interest from the day you make your purchase. In
the long run, they will make up the difference by
doing this.
5/ Spend a few hours examining all the cards on
offer and write down which things you need and which
you don’t, calculate how much you can save
by using the free offers such as insurance, cashback
and such, and how much you can pay each month to
clear your debt.
6/ If you have to use another card at
the end of the offer, apply for it a month before
you need it and transfer your balance a few weeks
before the first one expires. These offers usually
only allow a few weeks window to make a transfer,
make sure the 0% offer is actually what it seems and
make the transfer quickly after getting the card,
that way you can avoid any problems and delays and
ensure you don’t get into any interest period
by mistake.
Which credit card to use will be different
for every one and will depend on your current debt,
how you live your life and your income. Remember, these
offers will NOT solve your debt problems, nor will they
postpone repayment for ever, they are however, a good,
interest free way of gaining more time and can give
you breathing space while you concentrate on tackling
the problem.
Finally, like the best diet plans, have
a well thought out plan and stick to it!
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