Tuesday, November 26, 2013

What is Balance Transfers of Credit Card Debt?

Transferring the balance of a credit card debt is simply paying off high interest credit cards or loans with lower interest credit cards.

The benefit of transferring a balance is that one can substantially lower the interest rate of the debt, which helps one pay off the balance in less time and with less money. The negative of a balance transfer are the fine print. A “low interest” card may only last a few months or change at anytime.

Be sure to also avoid “cross default clauses” of the fine print which state that if you become late on anything you owe, including a phone bill or medical bill, then the interest rate goes from the low to a high default rate.

Make sure that the low rate does not only apply to new purchases or will be considered a cash advance and carry a higher rate.

Therefore, make sure to read all of the fine print and ask these questions to a customer service representative before transferring a balance for a lower rate.

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