Using Balance Transfer Cards after the Holidays

With Christmas and at least some of the sales behind us, peoples credit card balances are feeling the strain. According to the latest figures more than four million people plan on transferring their credit card balance to a new card in order to take advantage of zero interest introductory offers. If you are suffering a financial hangover from the festive season then a balance transfer can be an effective way of getting back on track. The average borrower plans to move $1,140 this month which is a significant sum but well down on last year’s figure. In a sign that the nation is trying hard to pay off its unsecured debt the average sum has halved from $2,290 last year and as a result our collective transfer will reach $3.2 billion compared against last year’s $7 billion.

Credit card lenders are prepared to take borrowers’ existing debts on to a zero per cent introductory offer which can last from as little as three months right up to as much as 16 months. They charge a fee based on the amount you are transferring. Their generosity is based on the assumption that many of those who transfer their debt will either fail to pay off the cash before the deal expires or will take on new debts following the deal so it’s not a completely altruistic offer. Anyone planning to transfer a debt can expect to pay between two and a half and three per cent charge on their debt. So anyone moving $1,140 to a new card will face a charge of roughly $34. If you do fail to pay off your outstanding debt before the introductory rate expires then the rate of interest you’ll pay will jump from nothing to around 16%. That means a $1,000 balance will start to cost you around $160 a year.

Having been there myself, your best bet might just be keeping the card you already have and making more then the minimum payment if possible. Even an extra $50 per month can make a huge difference. Balance transfer cards are really wolves in sheep’s clothing. So be careful, if you must get one, use it to strictly “pay off the original balance,” and nothing else. Do not continue to use the card for purchases.

Credit Cards that Allow Balance Transfers

Balance transfer credit cards are one of the latest, and new means of reducing credit card debt in a very short span of time. They have gained lot of fame because of their convenience of merging numerous credit card debts on them. The best benefit of balance transfer credit cards are that they only let balances accumulate on one credit card through an application process, by doing this, the debts can be easily stopped from building to ridiculous sizes.

There are a lot of banks and financial institutes offering low interest rates on their balance transfer credit cards. Those looking for reduction in their credit card debt should definitely go for balance transfer credit cards with 0% interest rate. It is a reasonable quick fix so to speak if your looking to pay off your debt in a year or two, instead of five years. This way your actually paying off the debt and not the interest. Also try to find a card that has a “no balance transfer fee.” No reason to pay extra when you don’t have to, and there are plenty of cards out there that offer this. Check out Balance Transfer Cards, and see if one of these cards suites your needs.