Common Mistakes Made With Balance Transfer Credit Cards

Balance Transfer credit can be a great financial tool for you and your family. Many of them come with a 0% APR introductory rate, which can save you a lot of money. However, without the knowledge of how these cards work, consumers can find themselves in debt worse than before they got this wonderful card. While they can be safely used to help you out of certain financial difficulties, you need to know all you possibly can about the terms and conditions of your card. Here are some common pitfalls or mistakes to be aware of so you can get the most out of this card.




Learn about the introductory 0% and any balance transfer fees. If your card offered a 0% APR on transferred balances, make sure you are not being charged any interest on unpaid balances during the months of this period. If there are any balance transfer fees, know up front how much they are going to be. Some charge a flat fee of $50-$75 per transfer while others charge a percentage. If you are on a strict budget, these can add up quickly and make a difference. There are card companies out there that don't charge any transfer fee so try to find those cards.
 
Known the expiration date for your 0% APR. When you get your card, your introductory balance transfer rate should start when you make you transfer your first balance. If you're in doubt, contact your credit card company to find out the exact date. If it says 6 months, it should be 6 months. Savvy cardholders keep track of this so they don’t transfer $4,000 thinking they're paying 0% interest only to learn the period is up and they're being charged 14%. You have only a certain amount of time where you can make transfers and still pay 0% interest-know what this time is.
 
Don't confuse a cash advance for a balance transfer. Although it may seem like they're similar, they're not at least where fees and interest rates are concerned. When you transfer a balance, you're getting the advertised 0% interest and possible no transfer fee depending on your card. When you get a cash advance like from an ATM, you are subject to fees and higher interest rates. Some banks will issue checks for your transfer requests and these are treated as true transfers.
 
Pay your bill on time every month. Nothing will change your 0% interest to a much higher interest rate quicker than being even one day late with your payment. This will make their offer null and void. The interest rate can go up as high as 20%, which will make quite a difference if you're trying to pay off a transferred balance of $10,000 or more.  Whether you're making your p payment online or through the mail, allow for posting deadlines and mail time. To be on the safe side, you may want to sign up for auto pay.
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