Are you interested in using a balance transfer credit card to consolidate your debt, save money, and get better organized?
If you answered yes to this question, you’re in the same position as many other credit card holders.
However, there’s something you need to know: there’s more to a balance transfer than what you see on the surface.
If you don’t realize this to be true, it’s possible that you could make a mistake that costs you time and/or money in the future.
So, with all this in mind, let’s review a few balance transfer mistakes that could ruin an otherwise positive experience:
- Neglecting to compare balance transfer offers. There are hundreds upon hundreds of balance transfer credit cards. You can’t expect to find the right one on a whim. You need to do your homework upfront, as this will put you in position to make a confident decision.
- Forgetting to consider the balance transfer fee. Despite the many benefits of a balance transfer credit card, it’s not “all positive” across the board. You’re required to pay a transfer fee, which is a percentage of the balance you’re moving to the new credit card. So, if you’re transferring $10k with a three percent fee, you’ll owe $300. You don’t want to forget about this until the last minute. It’s something you need to plan for.
- Transferring your balance and then doing nothing. Once you transfer your balance (or balances), you aren’t required to do anything outside of making a minimum payment. However, the zero percent introductory rate won’t last forever. Once this expires, you’ll find yourself paying interest on the balance you carry from month to month. This is why you want to make as much progress as you can during the introductory period.
There are all types of mistakes lurking, with each one having the potential to throw a wrench into your financial plans. Fortunately, you can avoid these by considering your many options, knowing what each offer is all about, and taking action toward paying off your debt as quickly as possible.
Do you have any experience using a balance transfer credit card? Were you happy with your decision? Did you make any mistakes? Share your experience in the comment section below.