Low Rate Balance Transfer Credit Cards And What To Pay Attention To

Low rate balance transfer cards can be a minefield to navigate if you don’t do the right thing by these cards. learn how to handle them well and you should do well. If you remember one thing only, then remember never to …

So, you are in the market for a balance transfer card and found low rate cards to be a good choice. Well done, you are one step closer to achieving your goal of becoming debt-free. However, before you rejoice in utter exhilaration there are a few things you must know.

Rule # 1: Budget those dollars:

The whole purpose of getting a balance transfer card is to pay off debt in full. Chances are you have ended up with credit card debt because your current card has a high interest rate. A low rate balance transfer card will come handy for this purpose.

To make the most of your intentions to clear debt you should aim to budget your finances. Eliminate all unnecessary spending for the time being – at least until your debt has been paid off.

Budgeting must not be underestimated because the last thing you want to be caught up with is a balance on your balance transfer card after the promotion has finished. Whether this is 6 months, 9 months or longer is irrelevant. What does matter is the big fat $0 balance at the end of the promo period.

The quickest way to see where you spend too much money is by keeping track of your expenditure for a week or two. Write down all the money you earn and all the money you spend. Soon enough you’ll see where you tend to splurge unnecessary.

Rule # 2 Do not spend

What I mean by that is to never, ever spend money with your balance transfer card. It doesn’t matter what type of card you end up choosing, fact of the matter is the moment you make new purchases with this card you are creating more debt for you – debt that will only be paid once your primary debt (your balance transfer) is paid off in full.

Meanwhile the new debt (your purchases) will attract a hefty interest rate. The compounding effect of this is staggering!

Rule # 3 Transfer money to your new balance transfer card when you apply

There is no point in delaying the balance transfer itself. The moment you apply for a new card, choose the amount you wish to transfer and proceed as indicated.

Because of the time limit imposed to you by the balance transfer card you will need to make the most of the time given to you. The sooner you start saving money and repaying the balance, the quicker your debt will be paid off.

Please also remember that once your balance transfer card is approved by the lender your promotional time begins – even if you don’t possess the card as yet.

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Posted on Tuesday, April 6th, 2010 at 1:05 pm