Playing Balance Transfer Credit Card Game

[12:00:00 AM Friday, May 23, 2008]

Are you carrying a heavy credit card debt? If so, you can save some money by taking advantage of credit card balance transfers. With balance transfer credit cards you can take advantage of teaser rates that are offered several times a year by major credit card companies. Teaser rates are usually offered for three to six months after you receive the card. Rates can range from 0% to 9% and they are beneficial to credit card holders who have huge debts on credit cards with higher interest rates. By transferring the balance from the high interest card to another card, you will save money on interest.

Take it into account that most banks equal balance transfers to cash advances. Also, the balance transfer card may be subject to daily interest, which can add up quickly and often there is no grace period. The costs of transferring a large balance in these cases can be enormous. Try to choose a card that waives charges for balance transfers in the introductory promotional period.

Always read the fine print when applying for a credit card. Be aware of the term 'flat balance transfer', which will cost you fees on all balance transfers. You must be knowledgeable of the cost of all balance transfers. If you find nothing on the credit card application, ask a bank representative if there are any flat balance transfer fees.

Take advantage of the credit card 0% introductory period. Transfer the balance from your high interest card to the low APR card within this period to save on interest. Most credit card companies offer intro period on purchases and balance transfers. Read the terms and conditions of your plastic carefully to be aware of the terms of the introductory period. The advantage is that you are not paying interest on your debts during the intro period. Transfer your balance to the company that charges the lowest APR.

After you have transferred your balance to the lower interest card, you will receive a bill with a payment due date. Always pay before the due date and always pay more than the minimum payment, which is the lowest payment you can make if you wish to keep your card and your credit history in good standing. Credit card companies are happy when you only make minimum payments. This is the way that credit card companies rake in huge profits. Minimum payments extend the principal amount for months or years. If you make only the minimum payment, it will take years to pay off credit card debt and to repair your credit.

Balance transfer credit cards are a good short term strategy, but don't use them over an extended period of time. Be sure to check out all options before playing the balance transfer game.

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