Low Interest Rate Balance Transfer Credit Cards And How They Work

Learn how low rate balance transfer cards can help you take control of your finances within the next year. Understanding the small print can not only save you hundreds of dollars but also help you to repay your entire credit card debt as fast as possible.

Many people are confused about low balance transfer cards simply for the fact that the choices are so varied. Let’s face it, you can choose cards with 2.99% p.a., 5.99% p.a. or even 0% p.a. So what in the world is the difference between these cards and how would you know which one to choose?

Identifying the best offer is a matter of analysing the features of each card which can be quite tiresome and frustrating for non-geeks. Unless you have a general interest in these cards you simply choose them to help you save money by paying off your credit card debt faster.

One card that has performed well in the past is the BankWest Lite MasterCard. With a 4.99% p.a. for 9 months balance transfer, a $49 yearly card fee and 0% p.a. for 6 months (reverts to 10.99% p.a.) p.a. on purchases this card is worth a closer look.

Here is how these cards work:

When you have an outstanding credit card balance on a regular card chances are you will pay higher rates of interest compared to a low rate balance transfer card. So in order to save money you do the following:

1. Choose a low rate balance transfer card.
2. When you apply for the card online or in person select the amount of money (your debt) you want to transfer from your old card to your new card (ideally you transfer the lot).
3. You now repay your monthly minimum as usual, stipulated by your new lender and aim to pay off more than you need to fast-track your debt payoff period.
4. You aim to repay your entire credit card debt (your transferred balance) within the promotional period of your balance transfer card.
5. If all goes well you are eventually debt-free!

If the above does not apply then you have either spend money with your new card, creating additional debt, or, you have failed to budget your money for the purpose of paying off your debt in full.
Either way, you are still in trouble financially. So the best thing you can do is to heed the advice given on our site about balance transfer cards and then do your very best to repay your balance before the promotion is finished (this depends on your card and can range from 6 months to 12 months).

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Related posts:

1. How Low Interest Rate Balance Transfer Cards Work
2. How 0 Interest Balance Transfer Credit Cards Work
3. Low Rate Balance Transfer Credit Cards And What To Pay Attention To
4. How To Use Low Rate Balance Transfer Credit Cards
5. How To Compare Low Rate Balance Transfer Offers
6. Beating the Interest Rates Affecting Credit Cards
7. What To Look For In A Low Rate Balance Transfer Credit Card
8. Using A Low Rate Balance Transfer Credit Card Properly
9. How Balance Transfer Cards Work Exactly
10. Comparing Low Rate Balance Transfer Offers

Posted on Tuesday, April 6th, 2010 at 1:04 pm