0% Balance Transfer Credit Cards

0% Balance Transfer Credit Cards

Credit cards which offer a balance transfer service are a great option for people looking to work on getting their current debt down, credit cards which offer a 0% balance transfer rate are even better.

What's The Big Deal About 0% Transfer Credit Cards?

To explain why 0% balance transfer is so good, the concept of balance transfer should first be made clear. Balance transfer means simply to transfer the balance of debt of an existing credit card onto the new card, the good that comes out of this is that the interest rate on the new card should be better than the old, or in the case of 0% balance transfer cards, the interest rate doesn't exist for a set period!

For example, if you plan to pay off your $10,000 balance in the next 9 months on your current credit card with an interest rate of 19.5%, you'd end up paying back an extra $805 in interest. If you did the same but first transferred your balance to a new 0% balance transfer credit card (which stayed at 0% for atleast 9 months), then you'd pay $0 extra interest.

Catches Of 0% Balance Transfer Credit Cards

Make sure you can actually pay off the whole debt before the 0% balance transfer offer period runs out. Once this term is over the interest rate on whatever debt you have left will revert back to the usual cash advance rate which is a lot higher.

Don't miss a payment. Even if you're only a little late, this may mean that the 0% offer will be voided and the interest rate on the balance could go straight up to the cash advance rate, which is usually over 20%.

Paying less than the minimum repayment will also have this effect on the terms of your 0% agreement.

Going over your limit could again have the same effect, which means that you could be no better off than you were in the first place before you transferred your debt. In fact with the cash advance rate usually always higher than the purchase rate, the new card will probably be costing you more than the previous, IF you void the 0% balance transfer offer.

Please check with your credit card provider for full details of the terms and conditions, and any other applicable fees. Talk to a  ualified financial advisor if you want further information tailored to your personal situation.

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