Saving Money with a Balance Transfer Credit Card
If you’re serious about saving money with a balance transfer credit card, you should spend some time researching the available offers open to you. You’ll find there are plenty of different offers being advertised from various banks and lenders, so it can be confusing to know which one will save you the most money and help you regain control of your finances again.
Obviously, if you’re paying far less interest on your outstanding debts, you should find that your repayment amounts are being applied to reducing your balance, rather than paying high interest bills.
You’ll be saving money by paying less interest, but you may also find that the minimum payments due on your new card should be lower than the payments you were making on your previous card. Be aware, though, that in order to save money and reduce your debt, you should try to add your interest savings towards paying extra off your balance to pay it off once and for all.
Which Balance Transfer Option Will Save You the Most Money?
Most people will immediately aim for the lowest interest rate they can find, believing this will give them the best option for saving money with a balance transfer. However there are times when the lowest rate won’t necessarily be the best option for your personal situation.
The very lowest balance transfer rates advertised are often only available for a limited time, usually around 6 months. It can be tempting to think an ultra-low interest rate for 6 months will be the best way to save money, but remember that when this rate expires, the rate will then revert to the standard purchase rate again. This is often substantially higher.
If you still have a balance outstanding when the standard purchase rate kicks in, you could be right back at square one, paying high interest on your credit card debt.
However, there are balance transfer offers available that could allow you to benefit from a low interest rate for the life of the balance amount you transfer over. This means you can take as long as you need to repay your debt while still saving money with a balance transfer.
Before you decide to accept any balance transfer offer, take some time to do some research. Use a good balance transfer calculator to figure out which option will save you the most money in the long run. Then be realistic about how long you think it will take you to repay the amount you have outstanding.
Related posts:
- Will doing a 0% Balance Transfer Save Me Money in interest repayment?
- How to Make Sure a Balance Transfer Doesn’t Cost You More Than You Save
- How To Calculate How Much Interest You Will Save With A Credit Card Balance Transfer.
Posted on Tuesday, January 18th, 2011 at 11:29 am
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