Credit Card Balance Transfer - Real Advantage?

Most of us make the mistake of considering only the interest rate charged on the credit card when determining the best balance transfer card. However, there are other factors like the duration of the rate, the post introductory rate, the annual fee and the credits score required which must be considered. All this is hidden in the fine print and that is what is relevant when determining the best deal. Transferring our existing high interest credit card debt to a lower interest one is a very smart way of managing finances. It will not only free some cash but it will also bring down your expenses.

However, never opt for a deal that sounds too good to be true. Make it a point to read the fine print and apply only if you have a good or better than good credit score. Each and every balance transfer program claims to be the best. Hence, it is important to understand its features.

The most attractive aspect of such offers is that the interest rate charged is close to zero. However, this rate is a temporary rate does not last for more than a year. Never forget this when choosing your credit card. Some issuers offer the rate for not more than three to six months.

The interest rate charged during the introductory period may range from zero percent to three percent. This rate may be applicable only on balance transfers made or may be available on purchase made as well. If the rate is only for the former, then you will be dealing with two interest rates. Make sure you find out before you opt for the deal.

A fundamental rule as far as a balance transfer credit card is that the introductory rate lapses the moment you default or delay a payment. No excuses are accepted and no exceptions are made.

Even a day's delay is sufficient for the introductory rate to rise from zero% to twenty percent. Needless to say, this can spoil your financial calculations in a jiffy. Once the rate rises, it will never come down again. Further, most issuers charge a transaction fee which is based on the amount transferred from the high interest credit card to the current credit card. This added cost of the card should be considered when analyzing the cost of the transaction.

This analysis may help you determine that the so called 'good balance transfer program' is a very ordinary credit card once the introductory period expires. You should then ask yourself whether the deal is worth the effort or not. What is the point of opting for a credit card that offers benefits for a few months but leaves you in a lurch after that?