Paying too much credit card interest? It’s time to transfer your credit card balance. Here are four tips to help you.
Are you paying too much interest on your credit card?
At the end of 2009 there was almost $850 billion outstanding on credit cards in the USA alone. With interest rates on credit cards often as high as 20% or more, banks are raking in billions of pounds in credit card interest.
If you look at your most recent statement you will probably find you paid a significant amount in interest to your card provider. So, isn’t it time that you transferred your credit card balance to another card to reduce the amount you pay in interest? Here are four top tips to help you.
Shop Around
Firstly, make sure that you shop around to find the best balance transfer rate for you.
Don’t just ask your own bank. Head online and use a comparison site to examine all your possible options. Sometimes, a comparison website will actually offer different rates than if you approached a lender directly. Or, alternatively, call your current card provider and see if they can offer a better deal to you.
Find the Best Deal for You
Simply choosing the lowest credit card balance transfer rate might not be the best option. For example, a slightly higher rate that lasts for several months longer might save you more money in total. Or, you may have some bad credit which means you won’t qualify for the very ‘best’ card.
Pick the right deal for your circumstances.
Take Fees Into Account
Most credit card companies charge some sort of ‘fee’ for their card. This is normally in the form of an annual charge.
If you are paying a high interest rate on your existing credit card, you are generally better off paying a fee on a new card to take a much better deal. However, if the debt is short-term and you are planning on paying it off in the near future, you may actually be better staying with your current provider. The new card fee may outweigh any savings you make.
Short Term or Lifetime Deal?
There are two main types of credit card balance transfer rate deal:
- free period of typically around 6 months
- rate of interest for the lifetime of the balance (until the total balance is repaid).
If you are expecting to repay the balance within the interest free period, consider taking out an interest free card. If you are not expecting to do this, then you should consider a ‘lifetime’ balance transfer rate.
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