General Tips On 0% Balance Transfers

from ArticleInsider.com

When You Want to Consolidate to Save Money

Many credit card companies include 0% credit card balance transfers in their introductory offers. This can be a big advantage if you have high interest rate credit cards and can now qualify for cards with lower rates and high limits. By moving balances from your old cards to a new one with at least a six-month 0% credit card balance transfer, you can save up to hundreds of dollars over the life of the offer.

In some cases, you can find such cards offering the 0% for 9 months or more. The key here is to consider your options and to determine how you can best save money with the offer you select. Obviously, the longer the introductory rate is in effect, the more money you can save.

Why Should You Transfer Money?

It's all a matter of accounting. If you owe several thousand dollars on high interest rate cards, it makes sense to transfer the balances to get a break on the interest, even for a few months. In addition, if the card you transfer to has a considerably lower interest rate, you will save money the entire time you're paying off the combined balances.

Depending on how much debt you move to your new 0% credit card, your monthly payment may actually be higher than you expected; however, you will find that more of what you pay will go to the principle balance. For example, if you are making a $60 per month payment and $45 of it is paying interest, when you transfer the balance, the interest amount on the $60 of your payment may drop to $25 or less, meaning that $20 more is getting applied to your principle.

You'll find the totaled balances going down much faster when you use a 0% credit card balance transfer option.

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This article on 0% balance transfers was provided by ArticleInsider.com.