Balance Transfers

Transferring the balance from existing credit or store cards onto a balance transfer credit card can be a great start to getting rid of debt. Balances transferred onto a balance transfer card will usually attract a much lower interest rate for a certain period, the aim being to give you the chance to pay more of what you owe over the specified time.

Balance transfers differ according to the credit card you choose, so you may find one that offers 0% for 6 months, and another that offers 4.99% for 12 months. Usually, you will find that lower interest rates are offered for shorter periods of time, while longer offers have slightly higher interest rates.

Obviously it makes sense to choose a card that will accommodate your debt repayment abilities. If you can pay off your transferred debt quickly, then you may wish to consider a lower rate and a shorter time period. If you think it will take longer, consider a longer period with as low interest as possible.

It’s very important to think carefully about how long it will take to pay off the debt, as any transferred balance left unpaid at the end of the introductory period will revert to a higher rate, as specified by the card issuer.

When choosing the card, make sure you know what will happen at the end of the introductory offer and how much you will be paying. When you have opened the account ensure you have a confirmation of exactly when the offer ends – the issuer should confirm this in writing. If unsure, check with the issuer and ask for their confirmation.

When you are given the opportunity of lower interest rates from a balance transfer, you should do everything in your power to pay off the balance in the allocated time period.

It is also important that you don’t start spending on the new card or older credit cards just because you have credit available again. This will only lead you further into the debt spiral paying different rates on different cards.