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Using balance transfer offers to pay down credit card debt

Created: On October 27, 2010 @ 3:18 pm In

You’ve probably received one of those promotional offers from a credit card company offering a low introductory interest rate for signing up for an account or transferring a balance. While you may be tempted to take advantage of such an offer, here are some things to consider before signing up so you don’t end up with even more credit card debt than you already have.

How long does the promotional rate last?

Promotional balance transfer offers usually have a time limit associated with them. This type of offer usually offers a low interest rate or even no interest rate for a specific number of months, usually six months to a year. Once that period ends, the interest rate rises to the normal rate associated with the account.

Never sign up for a promotional offer to transfer credit card debt without understand where your interest is headed after the initial period ends.

Pay attention to your monthly statement

Not reading your monthly credit card bill could cost you big time. Make a note of the date your monthly payment is due so you aren’t late sending it in. Being late with even one payment will result in your interest automatically rising to the default rate, which could be as high as 25 percent or more.

As a side note, the bill also should show which of your purchases are being charged the promotional interest rate.

Consolidate credit card debt

A credit card balance transfer offer can be a smart way to [1] consolidate credit card debt if used wisely.

When you consolidate debt, use the low interest period to try to make more than the minimum monthly payment on the new balance to pay it off faster. This helps you work towards a goal since by paying more you can calculate how much time and interest you can shave off by paying more now instead of just making the minimum payments.

Take steps to insure that using a balance transfer offer will help with your [2] debt reduction plan, and not derail it.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2010/10/27/using-balance-transfer-offers-to-pay-down-credit-card-debt/

URLs in this post:
[1] consolidate credit card debt: http://www.debthelp.com/blog/2010/09/22/debt-consolidation-options-and-credit-counseling-no-instant-
fix/

[2] debt reduction: http://www.debthelp.com/blog/2010/10/21/debt-management-which-debts-to-pay-off-first/