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Credit Cards And Balance Transfer

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Smart credit card consumers can pit one card against the other and pay no interest ever on a credit card balance. It takes a little organizational skill, and a keen attention to detail, but it can be done. First, to get a 0% transfer offer, you have to have decent credit. I know, it seems like the banks would make the offers to people who need it the most, namely, those in trouble. But banks aren't charity, they're in it to win it just like the rest of us and they make money off fees. Why would they give up what has been a very lucrative income stream just to help out consumers?!

If you have decent credit, and a good job history, you're going to get a ton of offers in the mail. Take the first 0% balance transfer deal that comes along (you could go for 1% or 2%, but holding out for zero means you're just paying for what you spend, and not anymore!) Apply for the 0% transfer, and pay careful attention to when you receive the card and when they transfer your balance. The key is the fine print, and if you're one day late, they tack on accrued interest charges. Some banks have a 25 day grace period, though now it seems like most are stuck at 20 days. The 0% offer is usually for six months, which means you're going to have to make 6 payments to bring the balance down.

Make your payments as soon as you receive your statement, better yet, set it up for automatic online payments and be sure you set aside the money in your bank account. Automatic payments will help you in the near future.

Keep up with the direct mail pieces you are getting for any other 0% transfer offers. During the fourth month, apply for another. You choose the fourth month if you're mailing in your application but if you can get instant approval online, you can wait until the fifth month. Do not wait until the last minute to apply for a balance transfer to a new card because if they miss by one day, you get socked with interest. Maybe not the whole six months accrued, but banks can be tricky when it comes to collecting fees, so err on the side of caution.

In the fifth month, move the balance to a new card, and repeat the process five months later. You will now have three credit cards, with credit limits as high as your transfer amount or even higher. Two of those cards will have no balance on them, and you will have been making payments on the third credit card every month, which will reduce the balance that you are not paying interest on.

You can contact your original credit card to transfer the balance back at 0% for six months, or a new card that has sent you multiple offers. But the key is to pay down the balance, and keep the limits open on the credit cards.

This method can take a year or longer to pay off a balance, but that should be the ultimate goal. Four credit cards with decent limits (at least $2500) but with a zero balance on each card. This history and a pattern of steady payments should increase your FICO scores, which will qualify you for low interest rates on a home loan.

You can beat the banks at their own games if you carefully transfer balances among cards and pay the balance off! Plus, you can get 0% interest offers and pay nothing extra, if you're careful.

Credit Cards And Balance Transfer

Mostof us use credit cards extensively month to month and almost as many peopledon't use them to their full advantage and end up paying way more interest thanthey should. Here are some on how to keep on top of your credit cards and get the benefits you're entitledto.

Credit Card Do's

Pay off your credit card inFull

It goes without saying thateveryone should make their credit card payments by the due date and in full, ifpossible, to avoid paying any interest.

Always pay At Least theMinimum Amount

Ifyou don't you'll be charged non-payment fees as well as interest. If you always only pay the minimum amounthowever, it's a sure sign that you are living beyond your means and thatperhaps you need to re-assess your spending habits. Theinterest charged on your credit card will really add up over time.

Pay your credit cardautomatically

Organize to pay monthly without having to think aboutit. Arrange this with your bank if your cash flow permits, so you never miss apayment. Make sure you have enough fundsto cover the payments though, or you'll be charged late fees and interest.

Check your statements

Make sure all purchases are in fact yours and thatyou're not paying for someone else's purchases! It's more common than youthink.

Tick, Tick, Tick

Keep all of your receiptstogether and tick them off your creditcard statements each month then file or throw away (depending on whether or notyou may need them for product returns or tax purposes).

Make notes on your statements

Write short descriptions ofyour purchases on your credit card statements and highlight items for tax. Don't leave this too long ? it's too hard toremember later.

Make the most of your interest-free period

Many credit cards offer aninterest-free period, often up to 55 days. If your statement period runs fromsay 1 November to 30 November, you will receive more interest-free days if youpurchase goods early in the month, whereas fewer interest-free days will beleft if you make your purchase at the end of the month. Just make sure you pay off the closingbalance on your card in full by the due date to get the benefit.

Try a low limit

Consider reducing the limiton your if you don't need it. Not onlywill it take away the temptation but it will improve your financial position in the eyes of your bank if you go for say, ahome loan.

Don't bury you headin the sand

Talkto your bank or financial institution if you are having trouble paying off your credit card to see whether youcan organize a payment schedule that works for you.

Choose a card tosuit your spending habits

Choose a credit card that is right for you. If youplan to pay off your balance each month, you may not be concerned aboutinterest rates. Therefore you might wantto concentrate on things like fees, and rewards programs. If you don't thinkyou'll pay off your card in full every month, you will probably be moreinterested in a card with an attractive rate of interest.

Load Up

Payfor as many expenses as you can through your credit card (including big ticket items if your limit allows)to build up Reward Program points - butonly if you can pay the whole balance off in full each and every month.

Shop Around

There are many differenttypes of credit cards available from banks and other financial institutions, soshop around. When visiting credit card providers and asking about the cardsthey offer, asking the following questions to help you weigh up the pros andcons of each card:

?            What isthe interest rate?

?            Isthere an interest-free period and if so, how long is it?

?            Isinterest charged from the date I make the purchase or from when the statementis issued?

?            Howmuch of the balance do I have to pay back by the due date?

?            Isthere a reward scheme, and if so, what rewards are offered and what is the costof the rewards program?

?            Whatare all of the fees and charges associated with this credit card?

?            If Ihave any other accounts with this bank, do I get any rebates on my credit card?

?            Howwidely is the card accepted (i.e. within Australia and also around theworld)?

?            Whatcharges will I incur using the card overseas and what exchange rate will beused?

?            Doesthe card offer any other benefits?

?            Can Ihave additional cards on the account? What fees would be charged for this?

?            Do Ihave any protection if goods or services I've paid for using this card aredefective?

Credit Card Don'ts

Don't go over your limit

You will be hit with large fees for this as soon asyou do.

Don't have too many credit cards

Reduce the number of credit cards you have to reducethe amount you pay in annual fees and the amount of time you have to spendmanaging them.

Don't accept offers to increase your limit

If you don't really need the extra credit, say thanksbut no thanks. Be honest with yourself -could you really resist spending extra?

Don't keep using a credit card if you can't resistspending

If you know you can't afford to buy anything on creditcard and if for example, you have a shopping addiction, do yourself and yourfamily a favour and cut your credit card up! It's not worth the emotional and financial stress.

Don't use Cash Advances!

Most banks will charge a fee for a cash advance, aswell as charge interest from the day you get the cash i.e. there is nointerest free period like there is for normal purchases.

Don't use your credit card for long-termborrowing

Credit cards are not a costeffective way of funding long-term borrowing. If you have a few debts such as credit cards, leases, car loans and ahousing loan, speak to your bank about consolidating your debts under oneumbrella credit product. This way, instead of paying a higher rate of intereston your credit card, you will pay interest at home loan rates, which areusually much lower.

Don't be sucked inby Rewards

If you don't think you'll be able to pay off a every month in full don't sign up. Theinterest you will pay will more than likely outweigh any rewards you may get.

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About Author

Both Michael D. Strauss & Deb are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Michael D. Strauss has sinced written about articles on various topics from Credit Cards, A Secured Loan and Finances. Michael writes for Card Sense, where you can find reviews of the , including cards with rewards or cashback, ones suitable for people with poor credi. Michael D. Strauss's top article generates over 165000 views. to your Favourites.

Deb has sinced written about articles on various topics from Credit Cards, Shopping. Deb Wilson has been interested in making, understanding and managing money from a young age, Deb went on to study Business at University, graduating with a Bachelor of Business (Accounting with Computing) and later completing Post Graduate Studies in Busi. Deb's top article generates over 880 views. to your Favourites.

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