More on Using Low Intrest Credit Cards
Run the Numbers.To get the most from your money, you must run the numbers. For example, consider a six-month rate of 3.99%, with a balance transfer fee of 4% (no ceiling). It is really 11.99% (3.99 + (2 x 4))! Here, you want to use balance transfer offers with rates greater than 11.99%.Include fees and charges, in your equation. Many credit calculators are available on the web. They help in doing the math. If the numbers show no benefit (i.e. no large money savings), it’s probably not worth the effort. Comparison Different Offers.Let's say you get an offer in the mail. Write the fee and rate information and then start shopping. Many banks want your business. They are willing to give good rates and terms. You simply need to look for these credit options.Many introductory offers are made solely by mail. So, don’t be so quick to trash those envelopes, which are obviously credit card offers. There are some gems, which include offers with no expiration date. In other words, the offer remains in effect until the balance is paid in full. Note on balance transfer fees: There are times when it pays to have a nominal fee for a balance transfer. This is if it results in interest savings. However, try to avoid fees if possible. If you have an offer with fees, sometimes the bank waives or reduces fees, when you call and ask. If not, be sure the math works in your favor. Follow the Money.Be aware where your money is going. Often, major mistakes occur by not knowing when a low-rate offer ends. You end up letting the debt ride to a higher interest rate. Know which cards hold which rates.Track offers.With introductory offers, mark your calendar with the offer beginning and ending dates. This guards against a higher interest rate. Pay the debt, before the introductory period ends. Or, transfer the balance again.Balance transfers.
How do balance transfers affect a credit rating? Views vary from “risky”, because of the many open credit accounts, to 'it really doesn’t'. Among many experts, the consensus is balance transfers do not adversely affect credit rating. This is only as long as you do not do so excessively. Some believe balance transfers actually help!
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