Balance transfers are considered to be a good deal by most cardholders. Through balance transfers, a consumer can transfer debt from high interest rate cards to one low-rate card, thereby saving money and simplifying monthly debt payments. However, there are cases when a credit card balance transfer may backfire. In such instances, the consumer may end up increasing his debt, rather than reducing it!
Here are some common balance transfer mistakes that you should avoid in order to save yourself from paying lots of fees.
Ignoring the Fine Print: Before making the final decision to transfer your balance, review the fine print and make sure you understand the terms of the card to which you are transferring your debt. Most balance transfer cards come with a variety of terms and conditions, and these can often be misleading. While your balance transfer card may be offering a 0% initial APR, it is possible that you will be charged an exorbitant APR after just a few months after transferring the balance, and this would effectively negate the benefits of the transfer.
Overlooking the Balance Transfer Fee: Most balance transfer cards charge a balance transfer fee. This is either a fixed fee, or a fee based on a percentage of the balance. Of course, depending on the amount of the fixed fee, the amount of the balance, and the percentage rate charged, one of these options may be far more cost-effective than the other. Once you've calculated what the transfer fee will be, you'll want to compare that to how much you are likely to save on interest over the course of the time you'll be paying on the card. This enables you to determine whether transferring your balance will ultimately save, or cost, you money.
Not considering the length of the Promotional APR: Once the promotional period on your card ends, you may be charged an APR that is substantially higher. Hence, it is important for you to understand how long the promotional offer is going to last, whether you'll be able to pay off the transferred balance within that time, and, if not, whether the interest you'll be charged after the promotional fee expires is acceptable to you.
Using the Card for Other Payments: While most cards offer low promotional rates on transferred balances, the APR for new purchases may be substantially higher. If you make new purchases with the card, credit card companies may direct your payments to go towards the lowest interest-based debt first. This means that your purchases will accrue interest at a much higher rate until you've paid off your no-interest balance.
Transferring Your Balances Too Often: Transferring your balances onto a new card (with a new promotional balance transfer rate) each time the current card's promotional rate has ended is a practice that can result in too many credit inquiries, thereby lowering your credit score. A lower credit score means that you may not qualify for better rates the next time you apply for a card or a loan.
Missing a Payment: Missing even a single payment can negate the introductory rate and have your balance changed to the default interest rate, which may be as high as 25% or more.
Going It On Your Own When You Need Large Sums for Your Business: There are great opportunities for getting $50,000 to $250,000 or more, if you know where to look and how to proceed. There are also ways to effectively get your balances transferred without paying any percentage on the balance transferred. Effectively, you can get up to $250,000 unsecured credit for your business at zero percent interest for up to 18 months. If you find yourself in a position where access to this kind of funding would be helpful to your business, I urge you to contact us at Fund&Grow. Our experienced consultants can typically tell you upfront the likelihood of your success with our program. Call us today to learn more at (800) 996-0270 or visit www.FundAndGrow.com.
Popular Posts
Want Actionable Information, Tools and Resources To Quickly Acquire Business Capital, Credit and Funding?
I take tremendous pride in building positive and lasting relationships in my businesses and personal life. Every member of my team is committed to helping our clients get the maximum amount of funding possible and achieve their highest growth potential.
have a question?
Our business experts are available to answer questions Monday - Friday from 9:00 a.m. - 7:00 p.m. EST
Call Us:
(800) 996-0270
Email Us:
service@fundandgrow.com
Watch our business credit webinar:
Obtain $250,000 Business Credit
Let's Stay Connected on Social Media!
For over 15 years, Fund&Grow has helped 30,000+ business owners get access to over 1.6 Billion dollars of business funding. We're on a mission to empower the small business owner by helping them tap into the smartest form of funding: Unsecured Business Credit – so that they can achieve their goals and dreams.
"Fund&Grow was created to empower small business owners, but more importantly, to support entreprenuers in achieving their business and personal goals while they lead the way towards innovation." - Ari Page CEO of Fund&Grow
Ari Page and the Fund&Grow team help business owners obtain access to credit despite the ambiguous lending climate. Many people feel ripped off and scammed by the bank bailouts and wonder why they can't use the system to their advantage the way the big banks did. If you have good credit, the Fund&Grow program will get you the funds you need to grow your business.
Find 4,000+ 4.9-star average customer testimonials on the following platforms: SoTellUs, Trustpilot, Google, BBB, among others.
All credit is subject to lender approval based upon credit criteria. Up to $250,000 in business credit is for highly qualified clients over the term of the membership with multiple credit card batches and/or credit lines. Introductory rates of 0% apply to purchases and/or balance transfers after which it reverts to an interest rate, which varies by lender as disclosed in the lending agreement. Fund&Grow is not a lender.
© 2024 Fund&Grow. All Rights Reserved.