Using a 0% Balance Transfer Credit Card Without Getting Burned In The Process

A 0% balance transfer credit card can be the solution to your problems, or a new problem just waiting to begin. Knowing how to manage this type of card is vital if you plan on getting one.

Don’t get burned with 0% balance transfer cards

One of the most common mistakes people make when they get a 0% balance transfer card is to use it for purchases. While there are some cards that can be used to pay for items, the majority of balance transfer cards have been designed to to be used exclusively to pay off the balance.

The only time you should consider using your card for spending is if the promotional time period for the balance transfer comes with a promotional period for purchases as well. The time period and interest rates must match exactly for both, otherwise any repayments you make will only go to the balance transfer, and your purchase balance will sit on hold and accumulate interest. These are called 0% balance transfer and purchase credit cards.

When this happens you will be back in an unfortunate situation. You will have created a new problem for yourself while you’re trying to handle your debt issue.

Another common mistake with these 0% balance transfer cards is not budgeting to pay off the debt. If you are going to take the time and trouble to apply for a card and transfer the balance, it only makes sense to make sure that the debt can be paid off during the promotional period offered on the card.

You can really make a lot of headway paying off your debt if you budget paying it off in time. Little or no interest will be added to the balance which gives you the opportunity to pay off debt instead of interest.

It is important to pay off as much of the debt as you possibly can every month. This does not mean, however, that you have to leave yourself short and survive on bread and water all month. It does mean that you should do everything possible to cut out some unnecessary expenses so that your payments can be higher.

Some people make the mistake of losing track of the promotional period expiration date. Consider writing down the expiry date on your calendar so that you have a daily reminder to clear up the debt, and it is more real to you that you are on a time limit.

Some people also don’t make the transfer early enough and lose valuable time. It is important to start the transfer process as soon as you can so that you can make the most of the 0% rate. Some cards give you as little as 30 days to make the transfer once the card has been approved, and if you make it later, the offer is withdrawn.

If by any chance you are not able to get the debt paid off in time, you can exercise your option to transfer the balance once again to another 0% balance transfer card that has a longer introductory period.

If you’re looking for a 0% balance transfer credit card, chances are you have run into a serious debt problem on your other cards. You need to learn from your mistakes and not duplicate what brought you into this state in the first place with your new card. Treat it like gold, use it for its intended purpose and get out of credit card debt once and for all. Financial freedom can be yours.

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Posted on Tuesday, May 4th, 2010 at 11:08 am