Shift The Balance Of Credit Card Power

If your credit card has an extremely high balance or is maxed out, it can seem impossible to pay off. You might be forced to borrow more money in order to make your monthly payments. Perhaps you can only afford to pay the minimum payments, but you know that it will cause you to owe more in the long run because of the interest.

One option that you can consider is taking advantage of balance transfers. Balance transfer credit cards allow you to shift your balance from your current credit card to the new credit card. These credit cards usually have a very low interest rate for a specific period. After the period is over, the interest rates will increase and various fees will be charged. Usually, balance transfers cards have 0% APR for a year or so. This can be extremely helpful if you want to make payments on your card without accumulating interest.

It can also be helpful if you are desperate to put your payments on hold for an allotted period of time. So, if you are temporarily laid off or you become injured or sick, you can put off worrying about an increasing credit card balance until later. You should only do this if you are desperate, since the interest rates on these cards can be significantly higher than regular credit cards after the low rate time period. Something else to watch out for with these cards is that the companies are usually free to make changes to the contract at any time. So they could increase various fees or rates as long as they give you notice.

Balance transfers cards are most helpful when you know you will be able to pay off the balance before the time period is over. If you use the cards in this way, you will save money. Instead of watching your debt number grow larger, you will watch it decrease significantly each month.

Balance transfer cards are a great alternative to borrowing money from cash advance companies in order to make your monthly payments. Cash advance places often charge ridiculously high interest and the interest accumulates much more frequently than regular credit cards or loans.

Balance transfer cards can also help your credit rating. When you first shift your balance to the new credit card, your credit will suffer slightly. However, as you pay payments toward your balance, your debt will greatly decrease. This will improve your credit score significantly. Having a great credit score will allow you to qualify for better credit cards in the future.

Another way that balance transfer cards make a profit is by charging penalty fees if you are late making a payment. Before you accept a balance transfer card offer, make sure you are certain that you can make the monthly payments. Consider making your payments automatic so that you will never be late. This will help you avoid unnecessary fees and make the balance transfer worth it.

You should also avoid making purchases with this balance transfers card. Balance transfer cards are debt tools. They exist to help you get out of debt. Using them to make purchases will only worsen your debt.