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[#1]0 On Balance Transfers

by Jay Mayweather, Jay

redit card companies have flooded our mailboxes with 0% APR balance transfers for years now. Most of us are so tired of seeing these credit card offers in our mailbox, we don't even bother to read them. However, you may have noticed less credit card junk mail lately. According to MSN Money writer Liz Weston, many companies have cut back their mailings by 50% to 70%. And with less mailings, there are already less 0% balance transfer offers.

Savvy credit card users have long taken advantage of 0% APR deals. One common technique is the 0% balance transfer game. Here's how it works. First, you take a high interest balance (anything above 10%) and transfer it to a 0% APR balance transfer credit card. Generally, this rate lasts for 1 year. When the 0% rate is about to expire, you apply online for a new credit card, transfer the remaining balance, and enjoy another year of life without credit card interest.

Some people take the balance transfer game a step further by placing the money they owe on their credit cards into a money market or investment account to earn additional income from the money being borrowed at a 0% APR. Even with an interest rate of 4%, you still earn an additional $40 per year on every $1000 dollars you borrow at a 0% interest rate.

Unfortunately, 0% APR balance transfer offers may soon become a thing of the past. Already, credit card issuers like Chase have stopped approving people they deem serial balance transfer gamers. Additionally, many of the best balance transfer offers, such as no fee balance transfers, are no longer being offered. At present, there are only three credit cards that offer 0 APR no fee balance transfers. And these cards only offer 0% interest rates for six to nine months.

The MSN money article cited above is aptly titled, "The credit card party is officially over." In it, a number of sources indicate that credit card companies will soon be replacing highly desirable 0% APR balance transfer offers with 4% or higher rates. When this shift occurs is unknown. However, with the credit crisis unfolding, it may be sooner than later.

Given the current state of affairs, now is the time to take advantage of a 0% APR credit card. To get the most savings, the first type of offer to consider is the aforementioned 0% APR no fee balance transfer. While a few of these offers still exist, they may not be around for long. With a no balance transfer fee offer, you save on the 3% transaction fee imposed on every balance you transfer.

To lock in savings on your current balance as well as any new balance you expect to have, the best bet is a credit card that offers a 0 APR on purchases and balance transfers. While the number of offers in this category has decreased dramatically, there are still a number of offers on the market that provide a 0% interest rate on both for a full year.

You can learn more about 0% APR credit cards and start saving money with a 0 APR balance transfer credit card by applying online at Smart Credit Choices.

Broke, in debt, and on the lookout for a quick fix? In that case, the offer of a 0% credit card balance transfer is sure to have caught your eye. Many among us jump at such offers without much forethought. 0% deals on balance transfers or purchases seem irresistible, right? Well, hereis a word of caution: before investing in this new credit card do not forget to check the interest rate beyond the interest-free period. Get wise, before this apparently brilliant balance transfer plan gets the better of you.

The Good Life With 0% Credit Card Balance Transfer

If you have an enormous outstanding credit balance, these 0% credit card balance transfer will seem all the more lucrative. You can have your pick of companies, with many out there offering this scheme. If you play your cards right, you might even be able to save hundreds of dollars on the interest you pay through a 0% credit card balance transfer. And you can stop worrying about your mounting debit at least temporarily.

Reality Check On 0% Balance Transfers

Despite the obvious attractions, it is worth giving a second thought before you cut up your old credit card to make room in your wallet for the new one. Companies often fail to clarify the fine print, hiding those rather unpleasant details which could cost you dearly in the long run.

Here is a textbook scenario for you: imagine you have a $1,000 outstanding balance on a 10% APR credit card. In other words, in a year the interest will accumulate to $100. On the other hand, assume you have a credit card that offers you 0% on balance transfers for a period of 6 months.

If you transfer your balance, it would cut down your annual interest by $50. Exciting, isn't it?

But did you bother to check what the interest rate would be like after the six-month interest-free period? The rate might turn out to be higher, and you don't want to be caught on the wrong side of the tracks with this information. Forewarned is forearmed. You need to plan ahead and not just a day or two before the interest-free period comes to an end. If you were to find that the rate of interest reverted to 25% beyond the free period in the above example, you would end up having to pay $125 as interest for 12 months, instead of just $100!%

Balance Transfer Pointers

The next time you consider shifting loyalties as far as credit cards are concerned, help yourself byasking these questions:

1) What will be the interest rate once the initial six-month 0% balance transfer period is over?

2) Is it close to my current APR or significantly higher? What is the net difference?

3) What will be the long-term fallout?

4) What are the total costs of the new card? Will I end up shelling out more with this card over the long haul?

5) Do I want to get into the habit of switching from one 0% balance transfer card to another?

Remember, if your current card offers a better long-term rate than the new one, it makes more sense to stick with what you have got, especially if you have a tendency to carry card balances on your cards. A balance transfer card has its own pros and cons and if you wish to use balance transfers to your advantage, then you must consider the nature of these "double-edged sword" card options.

Article Source : Pg. 15

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Both Jay Mayweather & Robert Alan 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.

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