A 0 percent balance transfer credit card is used by many individuals to pay off their credit debts. Many people receive these offers and you can find a lot of them on the Web. Before you sign up, brushing up on some basic facts about these cards is necessary.
Not Totally Free
Even if there is zero interest, it does not necessarily mean you will not pay anything. Almost all cards will have a balance transfer fee. Most will set the charge on a percentage of the amount you transfer. Most of the time it is 3%, but some rates could be higher than that. If you can find a company that offers something lower than that, even better.
When checking offers, clarify if the 0% offer is for old and new purchases or just the new ones. Majority of 0% credit cards are for new purchases only, so the old purchases you made cannot avail of it.
How Long is the 0% Offer?
The 0% is often called the introductory offer because that’s exactly what it is; something to get the customer to sign up. At most it will last for 12 months, with many lasting 6 months or shorter. So the advice for those in debt is to get a 12 month 0%, no annual fee card and pay it off within that time frame.
After the 12 month period expires, the regular (i.e. high) interest rate will be enforced. If you fail to pay during the period of the 0% offer, you will be faced with a high interest card.
Facts about Cash Advances
Some 0 percent balance transfer credit cards offer cash advances for a fixed rate. This offer should be accepted only on 0% cards; regular cards will charge a high rate. Before you take a cash advance, study the fees involved.
The processing fee usually comes up to 3%, so an advance of $1000 means you have to pay $30. In effect the 0% will have a 3% charge if you opt for the cash advance. No matter how much cash advance you take, it is imperative you pay before the 0% offer ends. Otherwise, you will have to pay a high interest.
Compare Various Offers
This is a necessity. Besides the 0% rates, many credit cards offer cash back options, bonuses, rewards and many other freebies. Comparing is not that difficult. There are many websites that specialize in credit card comparison. Look for the credit card that best serves your need.
The rule to remember is this: the card must have the features you need, not want. Everyone wants the most rewards, but your goal is to pay off your debt first, so focus on the card that can help you. Finally, consider consolidating your credit cards into one; it can make your finances easier to handle.
A 0 percent balance transfer credit card can help manage your debt in ways that old high interest card cannot. However you need to be aware of its limitations too, so you do not incur penalties.
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