How to make the most of credit card balance transfers

When used responsibly, credit cards can be one of the most effective ways to curb your debt problems and improve your credit rating - as long as you ensure you pay off the balance of your cards in full each month. One of the most beneficial aspects of credit cards is the ability to make balance transfers between accounts, particularly during the early months of your credit account when these transfers may be made at exceptionally low interest rates - sometimes even free.



Comparing the balance transfer rates of credit cards can be one of the best ways to evaluate which card to sign up for, as you may be able to find cards offering 0 per cent on balance transfers for periods of up to six months or longer. This can be an ideal way to borrow money at a low rate from your new credit card in order to pay off an old one, even when the older card is held with a different company. Without facing such a heavy rate of interest each month, responsible credit card holders will now find they have greater financial flexibility than before.

Credit card balance transfers can thus be an excellent way to combat money troubles, but card holders need to be diligent when carrying out such transactions. Depending on the bank or credit card company involved, there may be additional charges for balance transfers that counteract the interest saving of the transfer. Others may charge a joining fee or additional account fee, which also needs to be weighed against the benefits of the balance transfer they offer.



For savvy users though, balance transfers can be a highly effective way of paying off old debt and essentially borrowing money for free for a certain period - as long as you're able to balance all your various accounts to ensure they will be paid off each month. Because they can represent a risk to lenders, balance transfers may only be offered to customers with relatively high credit scores, and you should consider whether you will be likely to meet the monthly balance before applying, to avoid getting into further debt.



Credit card balance transfers are not for frivolous shopaholics or people who are likely to make unwise financial decisions, as the low interest rate carries with it certain obligations and responsibilities. If you make just one late payment on your new account, it could cost you considerably in terms of future borrowing.



The author of this article is a part of a digital blogging team who work with brands like Barclaycard. The content contained in this article is for information purposes only and should not be used to make any financial decisions.