How to Use a 0 Balance Transfer Credit Card

With this recession dragging on and on and everyone trying to cut costs where they can, a 0 balance transfer credit card can be a real money saver if you understand how the card works and how to get the most out of using one.

Knowing the ins and outs of the credit card can help you to save hundreds of dollars or more.

Why Companies Offer 0 APR Credit Cards

Credit card companies are very competitive and by offering zero percent interest balance transfer cards they hope to be able to entice the best credit card customers from other companies to change over to their credit card.

By the best credit card customers this means those who have good credit scores and show that they continually pay their credit card payments on time. If you have poor credit or often miss your credit card payments chances are you won’t qualify for one of these credit cards.

Pros of Switching to a 0 Balance Transfer Credit Card

There are several Advantages to switching to the best 0% interest balance transfer credit card. These advantages include:

  • There is no interest charged on the balance you transfer to the new credit card for a set amount of time. The credit card company determines the amount of time that you won’t be charged interest on this balance.
  • By not having to pay interest for several months on that balance you have moved to the new credit card you have the ability to pay off a large amount of the principal of this debt cutting your debt by hundreds of dollars or more very quickly.
  • Although it may take up to 30 days to get your credit card approval once you get it the card company makes transferring your balance from your old credit card to the new one easy.

Cons of Switching to a 0 Balance Transfer Credit Card

As with everything in life these no interest balance transfer credit cards have their negative side as well as their positive side. Here are some of the less favorable attributes of these 0% interest cards.

  • Many of these 0 APR balance transfer cards charge a transfer fee sometimes as high as 4%.
  • Transferring your balance too many times will lower your credit score and could make getting credit in the future more difficult.
  • Most of these cards have a universal default meaning if you are late on a payment you lose the time left on your interest free balance and immediately have to pay interest which in some cases may be more than what you were paying on your old credit card.

Get the Most Out of a 0 Percent Interest Credit Card

There are some things that you can do to get the most out of one of these 0% balance transfer credit card offers and using the following tips may help you to get the best deal available.

  • Read the fine print. Some of these cards charge a balance transfer fee and others don’t. Try to use one with no fees for transferring your balance or at least the lowest fee possible.
  • Understand the terms and conditions of these cards. Look for the amount of balance you can transfer, what happens if you are late on a payment, and how long the 0% interest lasts — when it takes effect and when it stops.
  • Pay as much as you can. Once you transfer the balance pay as much as you can each month to pay your debt down as much and quickly as possible. Do not put new charges on this card as interest is charged on new charges.
  • Pay attention to transfer limits. If the transfer limit is a $1000.00 and you transfer $1500.00 you will be paying interest on the extra $500.00.
  • Make your payments on time. This is to avoid late charges and automatic default that can force you to start paying interest before the no interest period ends.

A 0 balance transfer credit card can save you hundreds of dollars in interest if you understand the ins and outs of these cards and learn to use them to your advantage.

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How to Use a 0 Balance Transfer Credit Card was last modified: April 11th, 2014 by Paul Sarwana
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