If you are considering transferring you credit card balance to new zero percent interest card, you need to approach this move with caution. You need to be very careful of the steps that you take as you do this, or you may end up costing yourself more money in the long run. There are many different variables you need to consider before you transfer the balance over.
The first thing you should consider is if the card charges a balance transfer fee. This fee is usually around two percent of your balance, but it may be higher than that. You need to take into account whether or not you will save money if you include the transfer fee (usually you will). You should also consider how much that fee would raise the amount you transfer over, because you do not want to go over your credit limit on your new card. This can revoke the zero percent interest rates.
You should consider the length of the zero percent introductory offers. If you feel that you can pay the balance off in that amount of time, then it is a good offer for you. If you can’t and the interest rate after that is higher then your current card, you may not want to transfer. There is no guarantee that there will continue to be zero percent interest rate offers in the future. You may end up saving money keeping your credit card with the lowest long-term rate.
You need to beware of late payments. If you make a late payment your zero percent introductory rate will be taken away and you will begin to be charged a very high percentage rate. Many credit card companies will look at late payments for all of your cards, so you will want to take that into consideration. Be sure to read the find print and see if this applies to you.
Before taking out another credit card you need to make sure that you will stop your spending. It does you absolutely no good in the long run to transfer your balances to a zero percent interest rate so that you can pay it off, while you continue to charge up another card. You need to stop your bad spending habits, in order to make the most of these deals.