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Avoiding the Headache of Credit Card Balances TransfersWe are bombarded by television ads, mailers, and even phone calls telling us that we can transfer our high interest rate credit card debt to a lower interest rate card.
All of these ads make the process sound so easy that nothing could go wrong. In fact a lot can and does go wrong if the consumer fails to read the whole entire offer including all the very, very, fine print on the back. By not reading and understanding all of these details, you can actually end up paying more
interest than what you were paying with your old credit cards. Before you agree to transfer your balance you have to read all of the account agreement, and make sure that you understand the agreement completely. If you do not agree with all the terms on that card, then you should not go with it. Trust me this is not the only card that is available and the odds of you finding one that you understand the terms and agree with them is excellent. Before you agree to go with a credit card company, here are some key questions you need to ask, prior as you sort through the mountain of low-interest credit card offers. When does the introductory rate expire?
What is the annual percentage rate once the introductory rate (teaser rate) expires?
Does the introductory rate apply to both the transferred balances and new purchases or only to the original transferred balance?
Does the card have any annual fees and if so what are they and how much?
What are the late fee charges and the over-the-limit fee charges?
Is there a grace period and if so, how long?
Are there any balance-transfer fees? By not reading the credit cards terms and agreement, many consumers miss the fact that there is a fee for transferring the balance. Some credit cards charge transaction fees as high as 4 % of the balance you are transferring. This means that if you were transferring a balance of $5,000 the transfer fee would cost you $200. However, some credit cards do have a transfer fee cap of $25 or $50. This is why it is important to thoroughly read through the credit card offer more than once so that you can understand and decipher their terms. For example, credit cards will waiver the initial balance transfer fee, which are the transfers that are authorized at the time the consumer accepts the card and completes the balance transfer form. All other balance transfers are treated as cash advances and are subjected to cash advance fees. In addition, not everyone who receives an offer will qualify for the incredible-low rate. If you have a perfect credit rating, you may qualify for an
interest rate as low as 3.9 %, which unless you read the fine print, you wont realize will jump up to 17 % after six months. The individual who qualifies for a card with 7.9 % introduction rate may actually end up paying an annual percentage of 21% or higher after the introductory period is over. In addition, if you go over your limit or have one late payment, even if the late payment is due to the credit cards
company's fault, such as not crediting your account on time, then you can automatically lose the low rate. An example of this is a Platinum MasterCard from Fleet that has an introductory 9.99 % APR, which will jumps to 21.99% with only one late payment.
Credit Card Balances Transfers Part 2
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