Balance Transfer Ups and Downs |
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By: Patrick MacGregor Posted: 2007-08-05 17:23:17 |
| Having another credit card, especially when you have a 0% intro APR, is a great thing. With another credit card, you will have options in case you already maxed out your other credit card. In our present environment, we constantly need credit cards, and it's better to have another credit card to help you in paying for things.Another good thing about having another credit card is the ability to transfer the balance from one credit card to another. For example, your present credit card may have some outstanding balance that you need to pay. If you don't have the money to pay on the balance, the other credit card can be used as payment for the balance on the credit card that you need to pay on. It's like going in debt to pay for the present debt.This is a great option, especially when you have a 0% intro APR in balance transfers. There are many types of APRs right now, and if you have the 0% intro APR on balance transfers, this will be beneficial for you in controlling the payments on your credit cards. A common practice involves credit card companies sending you a check to pay for the credit card. There are also credit cards that are inter-connected, and you don't need to receive checks, and the card will just immediately pay your other credit card bill.There are two types of balance transfers in the credit card industry: no cap and those with a ceiling point. Each one has its own advantages and disadvantages, and it's up to you to select the one which is perfect for you.A no cap balance transfer will take care of your balance once and for all. Whatever the amount is, you can pay it with your credit card as long as you are within the limit of the credit card. With just one easy transfer, you can concentrate your payment with the card that you prefer to use. The disadvantage of a no cap balance transfer is that there is no limit to the transfer, and the rates are very high. Without a cap, you can just transfer as much as you want to another credit card, and the rates could be a percentage of the amount transferred. With no control, it's going to be hard on your finances, especially if you have a bigger balance on another card.On the other hand, there are balance transfers that will not pay all at once. In a month, there is a maximum amount that you can transfer with the corresponding fees. The rates are even better since the fees are laid out in front of you. There could be a minimum fee for balance transfer or the percentage of the transferred amount, which ever is higher.Whatever your plan is for balance transfers, make sure you contact your issuer to determine the rates. The rates will allow you to determine if its really worth it. Make sure you have the right information to avoid paying exorbitant fees that you were not even aware of when you made the balance transfer. |
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