About the Author
Theodore "Ted" Jenkins
I am Ted. I write, therefore I am.
A balance transfer is when one credit card company pays off your debts on your other credit cards. Now you owe money to the new credit card company, and usually at a lower rate of interest. A 0% balance transfer means that you will not be charged any interest on the money you owe, usually for a period such as 9 months, 12 months, or 14 months.
Advantages of 0% Balance Transfer Credit Cards
Once you get your 0% balance transfer card, you can use it to clear your debts on your old credit cards and transfer those debts to your 0% balance card. There are certain 0% balance transfer cards that allow you to pay off other non-credit card debts. Suppose you have an overdraft of $2,000 at 18% interest. You can ask your 0% balance transfer card to transfer money to your bank account. It transfers $2,000 into your account, which clears your overdraft, and now you owe it the amount at 0% for, say, 9 months.
You can actually take advantage of 0% balance transfer if it is done correctly. They are best used for balance transfers, and not for paying off your home decorators or existing personal loans. They are ideal for shifting your debts, and not for making new purchases.
Your new balance transfer card may not be charging you any interest for the stated period, but you should pay off the debt by the end of the period. If for some reason you are unable to pay back your dues, the interest rate jumps to a percentage that is much higher than regularly offered interest rates. Not paying off the debt on a balance transfer is especially risky if your job situation is unsteady.
Paying Your Debts
When you take the 0% balance transfer route, you should plan to get rid of your debts. A 0% debt is still a debt that you owe and always ensure that you can repay the debts. Plan to meet the minimum monthly repayments, or else you may be fined or lose any special offers.
The whole point of arranging the balance transfer card is to manage your debts better. Now that you have this 0% balance transfer card for about 9 months, make regular payments on your debts, so that at the end of 9 months you are debt free.
Published by Theodore "Ted" Jenkins on July 13, 2006 11:44 AM
