Balance transfers credit cards
Credit cards are a part and parcel of our daily existence. Whatever one does, they do form an integral part of our life. They are used everywhere from the gas station to the local store. However in simple words having a card means having debt. The best course of action is not to allow any debt to accumulate on your credit card at all. But then that?s an ideal condition, more utopian than real. The fact remains that a lot of us do accumulate debts on our credit cards. The result can be really catastrophic as along with the increase in debt the interest charges also cascade upwards. Thus a card owner is saddled with rising credit card debt and interest charges that seem to follow an upward geometrical progression.
Well the options are really very limited. The best option is that you pay back your entire outstandings. That may not be feasible in most cases. The next best option is to carry out a balance transfer from one credit card to another. What does this entail? In actual terms it means that you transfer your outstanding from one credit card another. That is the outstanding balance on say card Y is transferred to card Z. This is a tried and trusted method that can help you to minimize your interest charges and overall debt.
However not withstanding what is stated above the best course is not to get into debt at all. This can be done by paying your out standings every month- in full. This is really the only way to remain debt free and the major credit card companies like Visa, master, Discover and Amex cannot say no to it. This is the only method to avoid accumulating debt. There is none other. However for most of us this is difficult to achieve. We all know how difficult it is to live within your income. There is a good chance that as a reader of this article you would have accumulated a lot of debt on your credit card and you would be looking for a way to get out of it.
Well what are you supposed to do? Thankfully cut throat competition among credit card companies will give you a handle to get out of this jam. Your options though limited are viable and valid. You will have to follow the cardinal axiom of balance transfers i.e. Transfer your out standings from a credit card with higher rate of interest to another card which offers a lower rate of interest. The term used for this exercise is referred to as Balance of Transfer.
Obviously the chance that that you can do this at your own sweet will is not allowed. To carry out such balance transfers you will need a balance of transfer offer from the credit card company with a card that has a lower interest rate than the one you are trying to pay off.
14pt As I have already mentioned cut throat competition and the desire to corner a bigger pie of the credit card market has led all major credit card companies like Visa, MasterCard, American Express, and Discover to come out with a variety of cards whose interest rates are different and lower than what you may have. These companies have a special marketing department that regularly contact customers with such offers. Use your brains and latch on to a card with a lower interest rate than the one you have. Once you get an offer there is a definite chance that you could save a large some of money by transferring your balance to a card with a lower interest rate.
Remember in case you have a high credit rating than you are likely to receive many such offers. Make the most of such offers. However do bear in mind that that you transfer your debt from a higher to a lower interest credit card only. I will now correlate a few rules for your benefit. In case you as a reader of this article keep them in mind than you cannot go wrong. Firstly try to time your balance transfer in such a way that you are able to pay that month outstanding on your present card.
All of us have more than one credit card. Therefore you will have to decide on which of your credit cards outstanding you want to pay first. You may decide to pay the lesser outstanding on your card first or vice versa. Either way it will not make a difference except perhaps have a psychological effect when you see your debt reduce. Lastly you would have received umpteen offers from credit card companies with catchy phrases like "Limited time offer!" "Pay no interest for 6 months!" "0% till next May! These could be coming your way by mail or the internet. The best part is that most of such offers always carry an introductory low APR (which could even be 0 % )when you opt to get their credit card. This is a golden chance and not to be missed. Use such offers to your advantage and select what appears to you the best of the lot. Transfer whatever amount is permissible (In any case it cannot transfer more than the credit limit offered by the card company).
There is another option for you and that is to convert your outstanding to a loan and pay back in equated monthly installments called EMI. Most card companies do permit it but you will yourself have to contact the card company for this. Such loan is always a relief as the interest will always be lower than the credit card rates. The drawback is that you have to pay upfront. Maybe you may opt for this as getting out of debt is always a relief. There is a slight disadvantage in this scheme as it involves your paying hard cash up front. So in case your bank balance is low or you can't afford such payments for any other reason than its best to stick to balance transfers.
Remember to consult a financial advisor in case the intricacies of balance transfers confuse you.
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