What NOT to Do When Selecting a Balance Transfer Card

A balance transfer card can be a great tool to get our finances back under control. When getting a Balance Transfer Card, the thought is that you will move debt from other credit cards to it. Carrying multiple balances with ranging interest rates can be confusing. Do you pay the minimum on all? Which one do you spend more on, the most significant sum or the highest interest rate? Paying off multiple cards at a time is only sometimes the most practical option. Rolling all debt into one card to focus on can help get the job done. You are working on the balance of one card instead of many. It can help you stay motivated to get the job done and regain control of your finances. When using these options, there are some things you will want to consider. There are also some things you will want to avoid doing. 

Stop Reading

One thing NOT to do is to stop reading prematurely. When signing any contract, there is a lot to read. Every little thing is outlined in those pages of reading. For example, the headlines of a balance transfer card might read 0% interest. If you stop reading there, you may be led to believe that it will always stay at that interest rate. Those headlines are meant to grab the reader’s attention, hoping that readers will be impulsive. Keep reading. Read all the tiny print to find out more about the life of the card. Typically, they will offer the low interest rate for a limited time, which will increase for the life of the card. This is the information that you need. The only situation that does not matter is if you plan to pay it off before the end of the 0% interest period. Don’t get caught by the headlines. Read everything before signing on the dotted line. 

Big Purchases 

The purpose of the balance transfer card is to roll your debt into one and lower the interest on the total amount. The goal is that you can pay it off promptly. It would help if you had a good credit score to get the best rates. The worst thing you can do is make large purchases before applying for a balance transfer card. It would help if you kept your credit utilization score low. This is calculated by taking your credit limit and the percentage of it you have used. A large purchase will drastically change that rating. Keeping an excellent credit score will get you the best rates in everything you do in the finance world. The lower your credit score, the less beneficial the terms will be. Do all you can to improve your credit score before taking this action. 

Transfer Fees

Not looking into the transfer fees is another item that is often overlooked. When you transfer the balance, you have to pay a fee. And it is dependent on the amount that you are moving. More significant amounts will cost more. The typical range is 3%-5%. You must add this extra cost into the equation when choosing to use a balance transfer card. This is another part of the terms you must discuss before deciding the right path for your situation. Will it be worth it in the long run? Will it save you any money? Don’t skip over this vital piece of information. 

Options   

Do NOT choose to get a Balance Transfer Card without looking into all your options. Hearing about the benefits can make it seem like it is the answer for those with multiple balances. It does not mean that it is the best option for all individuals. The answer to those with debt is more than one size fits all. The best thing to do when needing help getting out of debt is to talk to a financial adviser. They have all the information that you could ever need. They know all the options and can look at your specific needs. While a Balance Transfer Card can be a great tool, there may be other options for you. Always consider all the options before choosing your path. 

Financial decisions are full of Do’s and Do Not’s. The choice to use a Balance Transfer Card is not any different. Don’t let yourself fall prey to the Do Nots.