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"0% balance transfer credit cards – the facts"

By admin | January 20th, 2008 | Balance Transfers, Credit Cards

The 0% balance transfer credit card is designed for those with existing credit card balances on which they are being charged high rates of interest. These cards enable borrowers to transfer these existing balances, thus benefiting from having just one credit card debt to deal with and more importantly avoiding interest charges on the balance for a specified period of time.

You should bear in mind that most 0% balance transfer credit card providers do charge a transfer fee, and the average fee is around 2.5% of the balance being transferred, often with a minimum charge in place. You will have a limited time within which you will have to transfer your balance, and once you have done this you will be able to enjoy a specified period of time within which to repay the balance without incurring any interest charges.

You should make sure that you avoid making purchases on a 0% balance transfer card, as not only will you be charged interest on purchases unless otherwise specified but your purchase balance will get trapped behind the transferred balance, where it will continue to accrue interest at a high rate. You should also avoid cash transactions, as you will also be charged interest and other fees on this type of transaction.

When looking for a 0% balance transfer credit card there are a number of things you need to compare. You should look at the length of the interest free period for balance transfers and you should also compare the transfer fee that the provider charges. This will help you to find the most competitive and suitable card for your needs.

A 0% balance transfer credit card can prove to be an effective tool for anyone that wants to save interest on their credit card balances, and if you already have balances on high interest credit cards you will probably already be aware of how high this interest can be. Most of your monthly repayment is likely to be swallowed up in repaying the interest if you only pay off small chunks each month, and this can result in the debt dragging on for years and the credit card company earning a lot of money from you in interest.

If and when you do transfer your high interest balances onto a 0% balance transfer credit card you should remember the importance of paying off as much of the balance each month as possible. If you only make small repayments then you may not clear the balance by the time the interest free period expires, and this could result in your getting charged a considerable level of interest on any remaining balance, as the interest rate will revert to the lender’s standard variable rate once the interest free periods comes to an end.

Tags: 0% balance transfers, Credit Cards

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