Transfer credit cards are a great resource to have when you are working in earnest to eliminate your debts. With the increase in incidents where credit card companies have jacked up credit card interest or limited your credit, many have found it harder to pay down credit card balances in this economy. This is especially true when dealing with the balances of multiple cards. On today’s market are the low balance transfer cards that allow you to move existing balances from other credit cards to one card with a lower apr. This balance transfer can lower your overall interest rates by only having to pay on one card.

Transfer credit cards are rules specifying that only transferred balances qualify for the lower rate, while new purchases collect interest at the regular apr, which can range anywhere from 8 percent to 28 percent. Some cards do apply the introductory interest rate to new purchases too, but often only for the first six months. To make matters even more complicated, you can’t make payments only on your new, higher-interest purchases if your card rules specify that some or all of your payment must go straight toward the lower-interest balance first. In some cases, this makes it impossible to pay down your higher-interest new purchases until you’ve erased the lower-interest transferred balance. Because of this, it may be best to avoid actively using a balance transfer card and select a different card altogether for new purchases.

transfer credit cards

Transfer credit cards are now available only with more restrictive terms: 0% for a limited time (6 to 12 months), a balance transfer fee with no ceilings, higher rates when the promotional period is over. There are still some companies out there with balance transfer deals worth checking out. Make sure you review their terms to pick the ones most suitable for you.

The biggest advantage to balance transfer credit cards is that if you can manage to pay down your entire transferred balances before the introductory period of the card expires, you can avoid accumulating interest charges.

It’s important to know what to look for in a card and how to use it wisely before making the plunge. A balance transfer may seem like the answer to your debt problems, but there are several hidden pitfalls that may undo all your potential savings.

Read related article here: Apply for Credit Card