You've certainly heard it said that there's no such thing as a free lunch. If you believe that, then you must be eyeing the current crop of 0% balance transfer cards with a wary eye, wondering where you'll find the catch that makes it not so free. The answer is - as it usually is when it comes to contracts - in the fine print. And the truth is, if you manage yourself wisely, you'll find that the cost isn't nearly so hard to swallow as the plastic chicken dinners that often masquerade as free lunches at banquets.
Now that I've stretched that metaphor to the breaking point, let's take a serious look at balance transfer credit cards and how they can work to help you get out of debt faster - and at far less cost than you'd think.
Balance transfer credit cards arose as a sales gimmick, a way to overcome customer loyalty to their favorite credit card company and entice them to switch over to a new one. The original balance transfer credit cards offered 0% interest on a balance transferred from another card for 6 months, 9 months or even a year. You paid a typical APR on any other charges made on that credit card - and that was part of the catch. Payments made on balance transfer cards are typically applied in whole to the transferred balance. That meant that as long as anything remained unpaid on that balance, new purchases sat on your balance accruing interest.
Some balance transfer credit cards had other catches as well. Unless you took the time to compare balance transfer credit cards, you might find that you were actually paying more in balance transfer fees than you would if you simply left the balance where it was and paid it off. A few required that the balance must be paid in full by the end of the introductory period, or you'd have to pay all interest that would have accrued at their typical rate in the month after it ended. And of course, there was always the typical APR that took effect AFTER the introductory period ended - which could be higher than your old credit card.
Savvy consumers caught onto the catches pretty quickly, though, and soon found loopholes that allowed them to simply shift balances from one balance transfer credit card to the next without ever actually paying off or paying down the balance. That's led credit card issuers to devise new 0% and low APR balance transfer credit card schemes that cater to those that transfer their credit card balances in good faith. These days, you'll find a wide variety of balance transfer cards available with differing schemes, making it more important than ever to compare balance transfer credit cards before you apply. Among the newest and best of these new cards are those that will offer you a very low APR on your transferred balance - for the entire life of the balance. That means that no matter how long it takes you to pay it off, you'll continue to pay the introductory interest rate which is sometimes still as low as 0%.
If you'd like to apply for a balance transfer credit card, but aren't sure which one is your best option, you can compare balance transfer credit cards at good comparison sites. You'll find everything you need to review credit card offers, compare them with one another and apply for balance transfer credit cards online. Take the time to read the fine print, and you just may find that there really is such a thing as a free lunch - or at least, a 0% balance transfer credit card.
The numbers of consumers that have been taken in by credit card scams have skyrocketed in the past decade, due mainly to online shopping and consumers divulging their credit card details to fraudulent persons. This can occur abroad as well as at home if you are not careful about where you shop. When you receive your credit card statement each month, you should go over it carefully to make sure that you have made the transactions listed and that there are none that you don't recognize.
You should exercise caution when shopping online. Some of the sites are not secure, which means that when you enter your credit card information to make a purchase the date is not encrypted and any users on the same server can quickly gain access to that information when they know how to retrieve it. Always check to make sure that there is a secure feature in place before you enter any details. It only takes a minute to do this to protect your finances and your identity.
In recent months there has been a flurry of activity among fraudsters in the way of unsolicited phone calls to consumers offering prizes and decreases in credit card interest rates. Once you give out this information you are essentially giving these unscrupulous persons permission to use your credit card and you probably won't even realize it until you receive your statement. Then it takes months of waiting for the credit card provider to investigate the claim and refund the money, not to mention the fact that you have to cancel the card and wait for a new one to arrive.
Phishing scams through emails are other ways in which you can become a victim of credit card fraud. You may receive an email from your bank or other credit card provider asking you to update the personal information associated with the card. This usually involves asking you to enter your card number along with the three-digit code on the back of the card along with personal information such as your mother's maiden name. This is enough information for these people to max out your card leaving you with the bill.
The Institute of Chartered Accountants in the UK has issued warnings about responding to unsolicited phone calls and emails asking for such information. In spite of these warnings, many UK residents have fallen for the fraudsters? tricks and have given out the requested information. Banks and financial institutions will never call or email you asking for such information. You should be suspicious of any phone calls or emails that require you to give the details of your credit card.
Phishing emails come from many different sources and look exactly as if they came from your bank or credit card company. If you are the recipient of such an email, you should call your bank or credit card provider first before you do give out any of your credit card information. Be very wary of any emails that ask for personal details that can give them access to your finances.
Alisdair Cosgrove has sinced written about articles on various topics from Auto Insurance, Credit Cards and Insurance Quotes. Alisdair Cosgrove is a freelance writer specializing in personal finance. You can read more of his work at www.JSNet.org for credit card comparisons including. Alisdair Cosgrove's top article generates over 74000 views. to your Favourites.