Balance Transfer Credit Cards

Sometimes it makes sense to apply for a balance transfer.  You might be able to take advantage of low interest teaser rates several times each year through major credit card offers.

Teaser rates are typically good for three to six months after you receive the card.  Ranging from 0% to 9%, they enable you to shift high interest credit card debt to a lower interest credit card.

Here is a huge selection of balance transfer credit cards from which to choose.  It includes Visa, Mastercard, American Express, Discover... and more.  You can compare offers and apply online.

The cost of transferring a large balance can be very high, so try to find offers that waive transfer charges for any balance transfer during the initial promotional period.

Take time to read the fine print because it's not uncommon for the total cost of completing the transfer to be prohibitively expensive.

Take advantage of the credit card grace period. Transfer the balance on your high interest card to the teaser card before the payment due date on your statement.

Most credit card companies provide a grace period of between 25 and 30 days. After the due date, interest is charged on the outstanding balance.

If you transfer the balance before the due date, you'll save money. Some cards have no grace period, in which case you are charged interest from the moment you charge an item or from the day you transfer your balance.

Although the balance transfer strategy can be highly beneficial, there are some red flags to consider.

A repeated pattern of transferring balances from one card to the next each time the teaser rate expires can be a bad idea. While it's true you can lock in some pretty good rates on your interest charges, it can still present other hazards.

More than likely, you won't be able to keep this strategy going indefinitely. For one thing, there's always the danger you could stop getting approved for future balance transfer credit cards.

If this were to happen, you'd be stuck holding debt at a much higher interest rate when the teaser rate expires and, then, jumps to its regular level. And, some of these so-called regular rates can be extremely high.

If you continue to open new low interest credit card accounts and avoid reducing the debt principal, this could worry lenders and potentially hinder your chances for borrowing money in the future.

Excessive balance transfer behavior can also make it tough to borrow money from other lenders outside of the credit card industry.

Another concern is that the low interest rate you get with a new balance transfer credit card may just apply to the transferred balance itself. You should find out if this attractive rate will apply to new purchases, as well.

Once the balance transfer is complete, always pay before the due date and always pay more than the required minimum monthly payment.

Credit card companies love it when you only make minimum payments... because minimum payments usually cover only the accrued interest or a portion of it.

This is how card companies rake in huge profits. Minimum payments extend the principal amount for months or years.

Each month you pay a minimum payment, it is taken off the interest. The following month, the credit card company charges the interest again and you pay it - again and again and...

Well, you get the idea. If you pay only the minimum payment, it will take years to pay off credit card debt.

Credit card offers that provide a balance transfer are a good short term strategy, but don't use it over an extended period of time.

One final thought... if you happen to operate a home business you may be eligible to apply for one of several small business credit cards.

Be sure to check out all options before playing the balance transfer game. If you don't, you may find you have created a financial nightmare that appears endless.