Balance transfers were very popular once and many people used them to avoid interest. What they used to do was getting one credit card after the other, shifting debts through them and enjoying free transfer deals. This practice continued for about 5-6 years and that was a great period for many people, while card issuers lost a lot of money. Then things changed.
Balance transfer fee has to be introduced and every time certain amount was transferred, 2 or 3 percent fee was charged. Understandably, many people lost their enthusiasm for this practice and the free debts were no longer possible. Loophole has been closed. But, transfer facilities still can be used, if you know what to do and how to make best use of them.
What you need to look for is the fee for the balance transfer. It's almost impossible to find a zero percent credit card but things are slowly changing towards this number. What you need to do is to look for the lowest percentage but you need to mind if there is any limit. It's sensible to have a capped upper limit for large balances. It is important to do the math here and see what is best for you.
Then, check out how long can you use that zero percent rate. The norm was 6 months, but you will notice that 12 months is a lot more common occurrence today. There are even some good deals and you can extend this to 15 or 18 months. Of course, the longer, the better. You should take note when this deal with expire so you can get a new card and transfer the balance appropriately. You want to have a new credit card ready before the introductory deal expires so you can transfer your balance before the interest rate starts to eat up your account.
Once you have a card and a good deal to go with it, you need to do several things. Do not use this card for spending because the rate will not be competitive to finance the balance transfer. If you choose to spend, your repayments will leave all these purchases sitting right where they were because the balance transfer will be cleared first. You can quickly build up your debt by doing this.
You shouldn't miss your payments because you will see that your balance is withdrawn and you will have to deal with interest payments then. No longer will you be able to use a zero percent deal and you will also have to pay a penalty fee.
Balance transfer fee has to be introduced and every time certain amount was transferred, 2 or 3 percent fee was charged. Understandably, many people lost their enthusiasm for this practice and the free debts were no longer possible. Loophole has been closed. But, transfer facilities still can be used, if you know what to do and how to make best use of them.
What you need to look for is the fee for the balance transfer. It's almost impossible to find a zero percent credit card but things are slowly changing towards this number. What you need to do is to look for the lowest percentage but you need to mind if there is any limit. It's sensible to have a capped upper limit for large balances. It is important to do the math here and see what is best for you.
Then, check out how long can you use that zero percent rate. The norm was 6 months, but you will notice that 12 months is a lot more common occurrence today. There are even some good deals and you can extend this to 15 or 18 months. Of course, the longer, the better. You should take note when this deal with expire so you can get a new card and transfer the balance appropriately. You want to have a new credit card ready before the introductory deal expires so you can transfer your balance before the interest rate starts to eat up your account.
Once you have a card and a good deal to go with it, you need to do several things. Do not use this card for spending because the rate will not be competitive to finance the balance transfer. If you choose to spend, your repayments will leave all these purchases sitting right where they were because the balance transfer will be cleared first. You can quickly build up your debt by doing this.
You shouldn't miss your payments because you will see that your balance is withdrawn and you will have to deal with interest payments then. No longer will you be able to use a zero percent deal and you will also have to pay a penalty fee.
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