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Credit cards transferCredit cards are the best alternative for cash. Credit cards offer you great flexibility when you are broke. All this sounds great, but your moment of ecstasy can turn into a nightmare. The fact is credit cards are the easiest way to a debt scenario. Believe it or not, over 50% of people who use their cards without discretion end up in debts. However, to make life easy for such people, financial institutions have introduced the balance transfer concept. Credit card users can transfer the credit on a low interest card to clear their debts on their old card.
Balance Transfer
Companies offer attractive balance transfer rates these days. However, it is important to evaluate all the underlying conditions before you go ahead and sign-up for a card, that advertises rock-bottom introductory rates. Remember, in the case of credit cards, what you see is not what you get. A laxity could cost you heavy charges and interest rates that you would have never imagined.
Beware!
There are a few tips that would help you pick the right offer amongst a plethora of options. The most important thing to do is to try and read between the lines. Yes, you must understand what the offer really means. Are there any additional charges Does the interest rate carry any hidden conditions For instance, a few credit cards offer a zero-charge transfer only during the first few balance transfers. Ideally, you would authorize these transfers when you fill the balance transfer form after accepting a card. So, other balance transfers will be considered as cash withdrawals, and needless to say, you will end up paying hefty interest rates.
Another important aspect is the rate advertised by a company. A credit card issuer advertises only the lowest rates, which means not everybody gets the same low rates. You might get attracted to an offer that carries 2 percent initially and 14 percent after 6 months. However, you would later realize that the interest you have been offered is 6% initially and 20 percent after 6 months. These are the hidden features that you have to look out for.
When you have defaulted on your dues, there is a possibility that your interest rate might jump from a low 5% to a shocking 22%. These can happen with certain cards and this is not something every company would advertise as a part of the initial offer. Deciphering this unstated condition is essential if you wish to save yourself from some torrid time in future. Moreover, interest rates may also rise in one card if you have been a defaulter in another card. After you have read and understood all the conditions, fill up the balance transfer application with care.
While you are waiting for the transfer to get processed, it is recommended that you make the minimum payment on the old card. This would ensure that you do not end up paying late payment charges and other fines. Finally, once the new card company notifies you about the transfer, make sure that you call up the old company to verify this. Remember, a blessing can turn into a curse if you are not on your guard.
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