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FREQUENTLY ASKED
QUESTIONS ABOUT BALANCE TRANSFER CREDIT
CARDS
You may be one of those
persons who use the “Balance Transfer
Credit Cards” and have several
unanswered questions on your mind. While
the benefits of using the “Balance
Transfer Credit Cards” are many, it is
best to find the answers for the
questions that you have. This article
will answer some of the frequently asked
questions about the “Balance Transfer
Credit Cards”.
1)
How does the “Balance Transfer Credit
Cards” save money for me?
These cards can save your hard money
because they reduce the total sum of the
finance charges that you have to pay
each year. This can be well understood
by taking an example. Let’s consider
that you have transferred $1000 to a
card with a low APR from a higher APR
card. If your higher APR card charged
you twenty percent then you financial
charges are $200 for the year, just to
maintain a balance of $1000. But, the
new account charges you only 8% per year
which will cost you only $80. Therefore,
you save a $120 for every $1000. Imagine
how much you will be able to save with
much higher transactions.
There are some “Balance Transfer Credit
Cards” that give you 0% APR till your
introductory period is over.
Some highly competitive “Balance
Transfer Credit Cards” companies
continue the 0% till the transferred
amount is paid.
2)
“Introductory Rate” – What is it?
This is the APR offered by the “Balance
Transfer Credit Cards” companies to
attract new customers and is applicable
for a short period. Your credit history
determines how long you get this
introductory offer. It can range from 1
month to 1 year.
3)
What exactly is the “Fixed Rate”?
The “Fixed Rate”, as the name suggests,
is the rate which doesn’t change.
“Balance Transfer Credit Cards”
companies who have a lesser fixed rate
will not give you the O% APR however
this may benefit you depending on your
situation.
4)
“Balance Transfer Credit Cards” are very
convenient. Is it true of a myth?
Yes, it is true. The “Balance Transfer
Credit Cards” are very convenient as it
keeps your entire debt at a single
place. This will make is very easy for
you to keep track of your expenses and
create a practical budget. You can also
know when you have to pay your bills.
5)
Can I pay only the minimum amount due
for this card?
From the legal perspective you are good
by paying the minimum balance. However,
this is an extremely dangerous habit
which may get you into serious legal
trouble in the future if you are not
able to make your payments regularly.
Therefore, it is always a good idea to
keep your debt as low as possible and
also become debt free if you can.
6)
Can this card help me clear all my
debts?
No and yes. If you think this is like a
magical pill, then you are totally
mistaken. You need to plan out your
budget and also make sufficient amount
of payments to this account. |
