With the many types of credit cards available today, it's important to always know what you're getting before you activate. This is especially true with balance transfers, which although they seem great, also carry some disadvantages along with their good features.
One saying we've heard all of our lives is "If it looks too good to be true, it probably is". This is often true with the popular cards offering balance transfers. Balance transfer credit cards allow you to transfer the balances from your other cards onto your new card. The main advantage of this is that instead of making numerous payments on many, you now only have one monthly payment to make at a lower rate. Consumers like this feature because it lessens their monthly obligations while allowing them to maintain good credit. These offers do not come without their disadvantages, however, and it's important that you fully understand the disadvantages they may have. We've always been told to read the terms and conditions of all offers before activating them and this is particularly true with those offering balance transfers.
These offers are being offered by many companies as a way to entice new customers and be competitive with the other companies. The 0% introductory APR is great because it allows you some time to pay off these debts without being charged interest, but if you're not careful, you may find yourself paying more than you thought. Offers often charge 0% on transfers but may charge a very high interest rate on any new purchases. In addition, they may not be able to be paid off until your transferred balances are paid in full. This can equate to you paying a lot in interest charges on these new purchases.
Another disadvantage to these is that these often charge a fee to transfer and this fee can become high if you're not careful. Another thing you may not be aware of and should is any penalties that may come with this. Some of these will not only charge a penalty if your payment is late but will also change your 0% APR to a much higher interest rate. As great as these can be, it's important that you know all the possible disadvantages of them before you begin using them so you can get the most possible advantages from them.