Staying ahead of credit card debt can be like trying to negotiate your way through sinking sand. The more you struggle the deeper into debt you get. Credit card balance transfers can seem like the solid ground you’re looking for but be cautious, it's only for the committed.
Balance transfers can be beneficial for those who are struggling to pay off one or more credit cards and want to consolidate their debts. They are appealing because they usually offer a much lower interest rate for the introductory period, which is usually 6 months. However, there are a few facts about balance transfers that you need to take into consideration.
Interest rate rise after introductory period
Are you committed to paying of your debt within the initial introductory period? This period of low interest rates is a great opportunity for you to get back on top of your debt and pay it off as quickly as possible. However, once the introductory period has lapsed the interest rate will revert back to a rate that is usually much higher.
Balance transfer transaction fees
Balance transfers can have transaction fees, so check that you're not paying hundreds when you switch over your debt. Scan over the terms and condition with a fine-tooth comb to make sure you’re aware of what you’re singing up for. Many lenders skyrocket rates as soon as you miss a payment.
Be a cautious shopper
Sometimes less is more, so when you’re rolling over your debt and putting in a concerted effort to become debt free, try to avoid impulse buys. The feeling of being debt free will leave you a lot giddier than an extra pair of shoes.
Shop – for the best credit card balance transfer
If you are focused and committed on paying off your debt, a balance transfer could be a great way to do it. Like everything, there are the good and the bad. Every credit card will offer you something different so you need to track down the one that best suits your needs.
A few things to consider are;
- How much can you commit to paying off each week?
- How large is your debt?
- How often will you use the card once you have paid off your existing debt?
- Can you restrict all spending during the introductory period?
Answer these questions honestly as it will help you identify the right credit card balance transfer for you.
Start your research by using RateCity's credit card balance transfer comparison tool.