Everyone has heard of 0% balance transfer credit cards. These types of credit cards may seem too good to be true to some people. It all depends on how cardholders handle credit. Transferring a balance to a new credit card can either help or hurt cardholders. There are certain things to look for when considering a balance transfer that can help determine which 0% balance transfer credit card offers the most benefits.
How 0% Balance Transfers Work
0% balance transfers offer customers the chance to eliminate or decrease the amount of credit card debt while receiving the benefit of paying no interest on the debt. This is an amazing opportunity to pay off the accumulated debt by transferring the balance to a new credit card. 0% balance transfers may be a foolish move for those who are not disciplined because they can always accumulate more debt on the new credit card with no interest. It can also save responsible cardholders a great deal of money in interest while getting rid of credit card debt.
Zero percent balance transfers are beneficial to the cardholder and the credit card companies. The credit card companies use this as a marketing tool. Balance transfers allow the credit card companies to increase the amount of debt owed to the companies and increase the number of customers with accounts with the credit card companies. Cardholders use this tool as a way to pay off debts and save some extra cash.
The 0% Balance Transfer Process Works as Follows:
- Customers open a new account that offers 0% interest on a balance transfer. Balance transfers are everywhere. Credit card companies love to offer balance transfers because they make more money in the end.
- Customers transfer the balance to the new credit card. Customer service representatives are extremely helpful in assisting cardholders with the transfer process. There is generally money left over on the new account in the event cardholders have unexpected situations in which they are not prepared. Managing the account is important to prevent cardholders from accumulating additional debt.
- Cardholders begin paying off the debt from the high accounts that transfer to the 0% interest credit card. Cardholders should pay off the balance on the new credit card as aggressively as possible to benefit from the no interest option on the new credit card. Cardholders should plan to pay off the account before the 0% interest period ends.
- Cardholders can transfer the remaining balance to a new credit card if necessary It is possible to transfer the balance to another account if the interest rate increases before the cardholder has a chance to pay the balance. The cardholders can continue the process as needed until the balance is paid in full.
Are 0% Balance Transfers Worth It?
0% balance transfers are definitely worth it if cardholders use the credit card responsibly. Cardholders are able to save a significant amount of money by eliminating the interest rates. Cardholders are able to eliminate debt and restore their credit worthiness.
Here is what to look for to benefit from 0% balance transfers.
· Lengthy Introductory Period
Cardholders should look for cards that offer a long introductory period. Cards that offer 0% interest for only a few months will not benefit cardholders. They may have to transfer the account to other credit cards for many years before paying off the debt.
· Low Interest After Introductory Rate Ends
Find a balance transfer credit card that offers a low interest rate after the introductory period ends. Credit card companies may charge as much as 20% to 30% interest on the balance after the introductory zero percent interest period ends. Cardholders can accumulate more debt if this happens.
· Pay Large Amounts on the Balance
Paying the minimum amount of a large transfer balance will not benefit the cardholder. Paying $50 per month on a $3600 balance transfer will not pay off the debt at the end of the 1-year introductory period. Paying at least $300 per month is the only way to pay off the debt before the interest accumulates.
0% balance transfers are designed to help cardholders save money and pay off debts quickly. Cardholders have the option to restore their credit and save hundreds of dollars in interest that can be used in whatever way they choose. This amazing opportunity is available from just about any credit card company out there. Cardholders should make sure that they read all of the fine print before taking advantage of a 0% balance transfer.