Credit Card Balance Transfer Revisited

Credit card balance transfer is one of the financial world's great empowering features, but they can only be done successfully if you follow the rules and not conflict with them. Firstly you must consider the merits, so pitfalls. These two aspects are more or less permanent feature of the credit card balance transfer system. 

The benefits can be summarized as the product of a double strategy: 

You can transfer credit card balances once the initial interest free period is up to another card, and so continue your interest free credit. 

You can more or less planning to do this in advance as long as you have a way to find new cards to transfer to, and you keep control of your economy and consumption. 

Taking these two together - transfers and planning - you can aim to give yourself interest free credit for a long time, even interest-free credit for years. 

The pitfalls are as follows and must be considered carefully. These are: 

Exceed the interest free period

This is a crucial and fundamental problem. There is no sense to sign a card with a known zero interest period or low interest period if you just go and disregard this period. Check the time, interest-free assignment ends and then back out of about ten days before then. Ten days is about the right time to apply for another card. Remember that the application itself will take time and that this time will vary from card to card. Take into account seasonal changes in the speed and efficiency record. In the run up to Christmas, for example, it would be wise to go around two weeks. 

Minimum repayment obligations 

Remember to check what your agreed monthly repayment schemes. You may have to pay back a certain percentage (three percent or more, depending on the card) or risk required minimum payment fees. This applies even if it occurs within the interest free period, when the credit card provider would like to know that you can at least maintain a minimum repayment to justify the confidence in you when you originally signed up. On some maps, however, such an arrangement does not apply. 

Late payment obligations

Much the same as above, but this time given to pay within a specified time per month. Again, the card issuer wants some kind of assurance that money will be repaid even if the interest is not paid. There will be an extra charged fee if your payment is late and too small balances that may well be proportionately greater than the interest which would otherwise have been paid (if the amount is a lump sum, which is usually the case). If this arrangement exists, the best policy is to pay the minimum on the same day that you get the statement. 

Renewal fees 

Remember to check the fine print before you apply for the card. This can include information about an annual fee is the fee the issuer will charge you every year to use their credit cards. Not at all credit card has an annual fee, but you must remember to build this into the total cost of using the card. Things like annual fees tend to muddy the APR figures which would give a good indication of how much your credit card actually costs. It is therefore an important factor to consider when deciding which credit card is right for you. 

Over Your Credit Limit

Whatever you do, do not exceed the credit limit that you agreed and signed at the time you have applied for the card. If you do this, you will probably be charged (depending on the card supplier) a percentage or a fixed fee. This would be particularly reckless, as it would go against everything you set out to do in the first place: to get a fixed amount of credit without paying interest on it! 

Of the above five negative factors to be considered, it is always best to think of them all because they each can have an impact in various proportions depending on credit cards and lenders. For example, a card does not charge annual fees, but will come down very heavy on late payment charges, while a second card will be lenient on an overextended credit limit, but will compensate this with a fixed annual fee. 

It is possible to meet the criteria for the first two positive benefits and avoid all the pitfalls by careful timing. As long as you transfer your credit card balances in time and observe the rules on the transfer itself, you can not go wrong. Always remember that there are several credit cards out there to transfer your balances to.