Balance transfer credit cards are fast becoming a popular choice for Australians. A balance transfer offers you an easy way out of a high interest credit card trap, by allowing you to transfer you old balance to a new lower interest rate with a special introductory period, that can start as low as 0% for 6 months. Understanding balance transfer deals can be a difficult task, however here are a few easy tips to help you understand a balance transfer offer.
1. Check the purchase rate on the credit card offer. If you currentl paying 20% interest, then the new credit card you are applying for should be lower. Some balance transfer cards are as low as 10.99%.
2. What is the special introductory offer rate. Balance transfer rates range from 0% to 5.99%, with a period of between 6 to 12 months.
3. Calculate that you can pay off your old balance within the special period time frame. After this period a balance transfer will revert to a cash withdraw rate, that is normally 20% or higher.
4. Check the fine print for fee’s and charges on your new card. Most banks will have some fee’s involved with a transfer. They differ from bank to bank.
5. Check the fine print of your old card. Some credit cards will charge you to get out of the account.
After you have done your research then you can decide for yourself, whether a balance transfer is right for you. It makes sense to transfer to a lower interest credit card, though the only way that you will be in front at the end of the process is to pay off your outstanding balance in the allocated time. Be sure to get rid of the old card. Most people get into massive credit card debt by keeping the old high interest card and maxing it out again.
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