Theyre an alluring proposition. Like the mythic sirens luring sailors to the rocks, credit card companies offer nonstop mailings to perspective customers, trying to get them to transfer credit card balances. The credit card sirens offer all sorts of lures, such as low introductory rates, rewards programs, even zero percent interestyet beware! The rocks of bad credit can be deadly to a happy financial life. So to protect yourself, be sure to follow these steps to knowing which credit card balance transfer options are the best, and which are actually traps in disguise. The first thing you should do when considering balance transferring is to read the fine print of any offer. Therein lies the true intent of the credit card companieswhether theyre offering fair ways to better manage your debt, or if theyre trying to get you into a situation where they can make the maximum profit off of your misfortune. Not to paint all credit card companies in bad light, because they are some that are honest and worth a look. To tell these good companies from the bad, look for the following in the fine print of an agreement. Check to see how long the intro rate will last. Is it just for four months before it jumps up to a high variable rate, or will you get 18 months at that low, fixed rate? Then logically, youll want to check what the rate jumps to after the introductory period is over? Will it be only a leap of a few percentage points? Or will you be in the 20+ realm of interest rates? The difference could mean hundreds, if not thousands, of dollars to you in payments. Next, check what all the terms of the new card will be. Will there be an annual fee, and if so, how high will it be? What are the late fees for the card, and the penalty for overcharging your balance? And what happens if you do one of these infractions? Will you automatically and instantly lose your low introductory annual percentage rate? And the million-dollar question is: What are the balance transfer fees? This is where a shady credit card company could make a killing off of your balance transfer. Some credit card companies, for instance, could charge as high as 4 to 5 percent for a balance transfer. Depending on how much youre transferring, that can really add up to a huge lump sum that is added to your balance. That leaves you to ask yourselfam I paying more for the transfer than Im saving? |
