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A Few Things Regarding Balance Transfer Charge Card Accounts
Opening a new credit card account may seem like the last smart thing to do when faced with mounting credit card debt. In one case, however, this may make sense and wind up saving you a lot of cash as well. This special exception is a credit card balance transfer, and is oftentimes available to anyone with a mailbox and social security number.
Credit cards are a big business today, with many companies making a fortune off finance charges. The average annual percentage rate is about 16% on most credit card accounts. With that kind of interest, it’s tough to pay down a charge card account, because it is consistently charging interest and adding to the principle. Even hot stocks are pressed to grow at 16% a year. Luckily, companies are so anxious for your business the balance transfer was invented
In an effort to lure consumers to their credit card account, many companies offer free balance transfers from your old charge card. Once the money is safely owed to the new company, they will often provide a grace period where they charge far less on the transferred balance. Finding two, one, or even zero percent interest is possible. Oftentimes this introductory rate lasts for around six months to a year after the balance transfer takes place.
For a savvy consumer, this can be an excellent method of reducing credit card account debt. It leaves the person free to pay down the balance on a credit card without incurring interest charges. Using this strategy, a person could potentially open a new account that offers a balance transfer when the old one expires. Then transfer all of the balance to the new card to begin a new grace period of low or non-existent finance charges. If you plan to do a balance transfer, be sure to close your old account.
Making a balance transfer work for you is an excellent practice, but diligence is required. Sometimes there is fine print attached with hidden charges. Some banks may charge a transfer fee that can be a percentage of the balance transferred. Be sure that there is a cap on the amount, like fifty or seventy-five dollars, or else a balance transfer in the thousands may end up costing a couple hundred dollars. Also, be sure the bank doesn’t charge a high annual fee, or joining fee. The credit card account companies are already getting your business, so don’t let them take the upper hand in a balance transfer.
When you are searching for the best charge card for balance transfers, make sure you use a reputable credit card comparison site like www.1-2-3-CreditCards.com. Also, Discover credit cards and Chase cards usually have the best offers so they would be a great place to start!
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