When you get those Balance Transfer Credit Card Offers

We all get what look like attractive balance transfer credit card offers in the mail. How do you know that you will really save much or anything at all taking them up on their offer? There are number of things you need to consider before making your mind up that transferring your balance a particular credit card make sense.

To begin with, there are online calculators out there that help you gauge how good these balance transfer credit card offers are that you get in the mail. The one at creditcards.com/calculators happens to be particularly well-trusted.

There are many people out there who carry thousands of dollars of credit card debt on high interest credit cards. What this means is, they're paying 24% in finance charges every month. That is very unfair; those are punitive rates. If you should get a credit card that makes transferring balances a sensible option, you should get it.

Let's say that you have about $10,000 in credit card debt and that you don't have anything right now to pay it down with not even $500. Let's also assume that you can only make the minimum payment every month. Normally, on a $10,000 debt, your minimum payment would be $300 a month. Put that together with the 25% interest you're paying, and it could take you a full 25 years to take that off. And you would be paying about $20,000 in interest alone. Does that not seem unbelievable? Well then, you need to look at those balance transfer credit card offers rather closely.

Now often, you can get a credit card that offers you 0% interest on your first year and a fixed 10% rate every year after that. Now right away, you save $2000 in interest in the first year because it's interest-free. After that, until you finish repaying your loan, you're going to save about $150 a year in interest payments and you save all this even when they ask you to pay a balance transfer fee of, say, 3%.

Certainly, compared to the kind of extortionist interest that you pay on a regular credit card, this kind of thing makes a lot of sense. But it still isn't a problem free solution. To qualify for anything like this, you need to have a great credit score. But you could try.

The only way you can get into trouble the only way is if you could contact your credit card company and work something out. Interest in for an interest rate reduction.

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