Guide to Choosing the Best Balance Transfer Card
A balance transfer credit card can help you get credit card debt large or small under control in your way. The sooner you recognise that your credit card debt is out of control, the easier it will be to avoid that bad debt ending up on your credit report when you can’t make payments. To turn your potentially bad debt into just another easy to manage monthly bill, find out more about the types of balance transfer credit cards available, and use our guide below to choose the best balance transfer card which suits you and your current credit card balance.
You will find out more about the following 4 types of balance transfer credit cards:
- The 0% interest balance transfer credit card.
- The low rate balance transfer credit card.
- The 0% balance transfer and purchase card.
- The for life balance transfer credit card.
The 0% Balance Transfer Credit Card
The 0% interest balance transfer credit card offer can mean that you go from paying up to 20% interest on your purchases to paying no interest at all. This can make a significant difference to the monthly repayment required, and will mean that all of that payment repays your balance, not empty interest charges.
Features of a 0% balance transfer offer include:
- A very limited offer period. While you can avoid interest payments with a 0% balance transfer, the bank isn’t going to let you get away with that for long. Typically a 0% balance transfer offer is for 6 to 9 months. This means you will need to repay your balance in full before the end of offer period because once the balance transfer offer has expired your interest-rate will revert to the standard purchase rate or the cash advance rate.
- Similar monthly repayments. Just because you’re not paying interest on your credit card balance doesn’t mean that your repayments will be significantly lower. The monthly repayments on a 0% balance transfer credit card may be similar to the repayments you were paying on your standard credit card. However in this case all of your repayment is going towards your balance and none of it to interest charges.
How to use a 0% balance transfer credit card:
- If you have a lump sum of funds coming in. If you know you will have a lump sum of funds coming in within the next few months which will be able to pay off your credit card balance in full you could benefit from a 0% balance transfer credit card offer. In your case you simply need somewhere to secure your credit card balance while you wait for your funds to arrive. With the arrival of your expected funds you will be able to repay your balance in full without worrying about the end of the balance transfer offer or a higher revert rate.
- If you’re willing to move around. If you have a higher credit card balance to transfer which you know you won’t be able to pay off within the 0% balance transfer offer period you must be willing to move your credit card balance again before the offer expires. Each Australian credit card provider will offer their own 0% balance transfer deal, so before your current offer expires start shopping around for the next best 0% balance transfer offer if you don’t think you’ll be able to repay your balance in full.
If you think you could benefit from a short focused balance transfer offer which doesn’t charge or any interest find out more here about how to apply for the best 0% balance transfer credit card offer now.
The Low Interest Rate Balance Transfer Credit Card
When you have the opportunity to choose a 0% balance transfer offer you might wonder why you would choose a low interest rate balance transfer offer instead. A low interest rate balance transfer can offer you more flexibility and more repayment time if you have a larger balance and don’t want to worry about switching balance transfer offers every few months.
Features of the low interest rate balance transfer offer:
- A lower than standard interest rate. While you are not paying 0% interest on your balance transfer offer you are still paying much less than you would be on your standard credit card. A low interest rate balance transfer credit card will charge you on average 3 to 5% interest where your standard credit card may be charging as much as 20% interest. Therefore while your monthly repayments on your balance transfer credit card will still include an interest portion that portion will be much lower. This means more of your payments are still going towards your principle balance rather than towards bank interest charges.
- More time to repay. Where you are exchanging a 0% interest rate for one which is slightly higher in return you are getting more time to repay your balance transfer. On a low interest rate balance transfer offer you are likely to have 12 to 18 months to repay your balance.
How to use a low interest rate balance transfer credit card:
- If you have a low balance. A low interest rate balance transfer credit card will suit you if you have a low balance to repay. While you will have more time to repay your balance than on a 0% balance transfer offer you a low interest rate balance transfer offer will still expire. This means you need to be very sure that you can repay your balance in full before the end of the offer to avoid the higher purchase interest rate.
- Make sure you pay more than the minimum repayment. While the interest portion of your monthly repayment will be less always keep in mind that you are still paying interest on your debt. Therefore take advantage of lower interest charges to allow you to pay more each month towards your credit card debt. In the extra payments you make in a month will go towards repaying your principle balance helping you to repay your credit card debt faster.
If you’d like more time to repay your transfer balance but still want to take advantage of a much lower interest-rate find out how you can transfer your outstanding credit card balances to a low interest rate balance transfer credit card and start saving now.
The 0% Transfer And Purchase Credit Card
Where every article you read about balance transfers will tell you not to spend on your balance transfer credit card, with a 0% transfer and purchase credit card that is not the case. If you are looking for a balance transfer credit card and a new everyday credit card then the 0% transfer and purchase credit card offers may suit you.
Features of the 0% transfer and purchase credit card:
- Will offer the same balance transfer and purchase interest rate. Normally on a balance transfer credit card new purchases you make on the card will attract the standard purchase rate of that card. However in the case of a 0% transfer and purchase credit card new purchases will be charged the same rate of interest as your transfer balance, while this is not always 0% it will still be a lower rate of interest than on your standard credit card.
- Watch out for a shorter purchase offer. A 0% transfer and purchase credit card can catch you out if the purchase offer is shorter than the balance transfer offer. In this case your new purchases start accruing interest while you are still repaying your transfer balance. This can undo all of the hard work you put into repaying your transfer balance because you are now attracting new interest charges.
How to use a 0% transfer and purchase credit card:
- Make sure the purchase and transfer periods are the same. As you compare 0% transfer and purchase credit cards make sure to choose a card with a balance transfer period and an introductory low purchase rate for the same period. This will mean that you can repay your transferred balance without having to worry about any new high interest charges.
- Remain aware of the end of the promotion. As you begin to use a 0% transfer and purchase credit card for new purchases it can be easy to forget that it is also a balance transfer credit card. Always make sure you are focused on repaying your transferred balance and you are aware of the approach of the end of the offer period. This will ensure you truly are making the most of the opportunity to control an outstanding credit card balance, and that you are learning new more financially responsible habits of the future.
If you’re looking for a balance transfer credit card which you can keep as your everyday credit card once you’ve repaid your balance find out more now about how to apply for a 0% balance transfer and purchase credit card offer.
For Life Balance Transfer Credit Card
A for life balance transfer credit card offer can give you the freedom and time that you need to take control of your credit card balance. However, a for life balance transfer credit card can just as easily see you stuck in the same bad credit card habits and becoming too comfortable with your new low interest rate to focus on repaying your transferred balance.
Features for life balance transfer offer:
- A slightly higher interest rate. While you are enjoying a balance transfer interest rate on your for life balance transfer credit card that interest-rate is still slightly higher than you would find on a balance transfer credit card offer which expired. However in return for a slightly higher rate you can take all the time you need to repay your balance.
- Check the life of your for life balance transfer offer. While a balance transfer credit card may advertise for life balance transfer offer make sure you check that the flow really is for the entire life of your balance. You want to ensure that you will be able to enjoy the lower interest-rate of your balance transfer credit card for as long as it takes to repay your balance. Unfortunately some for life balance transfer offers considered the life of your balance as one or two years which is much longer than a standard balance transfer offer but it does still expire.
How to use a for life balance transfer credit card:
- Is best for you if you don’t want to be limited. If you have a higher credit card balance which you need to transfer or if you are transferring from more than one credit card you may need more time to repay your balance down to zero. Plus you are using a balance transfer credit card because you want to avoid the pressures your cards are currently putting your under and with a for life balance transfer offer you can get out from under that pressure and take all the time you need to repay your credit card debt.
- Avoid new purchases. With a full life balance transfer credit card offer it is more important than ever to avoid making new purchases on your credit card. If you have transferred a higher balance or several balances from other credit cards then you are likely to be a long time in repaying about balance. Therefore any new purchases you make will attract a higher purchase interest-rate for longer and all the good work you are doing in repaying your transferred balance will be undone.
If you don’t want to feel pressured by your credit card any more find out how to apply for the best for life balance transfer credit card offer so you can take as much time as you need to get your credit card debt under control today.
Posted on Tuesday, April 27th, 2010 at 10:38 am
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