With so many choices of credit cards available in the market it may become difficult, sometimes, to select the one that benefits you the most. Balance transfer option is good for you if you find it difficult to manage your credits. Certainly there are some benefits of balance transfer options but one must not forget the risks and other disadvantages associated with balance transfer feature. Following points should be considered while selecting a balance transfer offer.
- Balance transfer fees:
Balance transfer fee is the major consideration when you review balance transfer offers. It varies from company to company and depends on the amount being transferred.
- Annual fees:
Annual fee of the credit card is another important point to consider while choosing between different balance transfer offers. You should also consider other features of credit cards besides balance transfer offer like discounts and other promotions. If you opt for the balance transfer option, do not keep using old credit cards. It will just increase your costs as you will be paying annual fees of all the credit cards and you might also occasionally use these old cards and will eventually have to pay the bills.
- Understanding all the terms and conditions:
It is crucial to read all the terms and conditions to prevent any surprises. Some companies may end the promotional low or zero interest rates if you make late payments. There may also be other penalties like late payment charges that you will have to pay for paying late. Reading is not sufficient. It is important that you understand what is written as the terms may sometimes not be as simple as they appear.
- Calculation of the costs:
When you review balance transfer offers, it is wise to calculate all the costs of using old credit cards with the cost of using this option. You should consider taking into account all the costs like interest charges, late payment fees, annual fees of credit cards and other hidden charges and select the option which has least cost associated with it.
- Interest rate consideration:
While assessing different credit cards, one should consider the rates of balance transfer offers. It is possible that a company is offering zero percent interest rates initially but ask them what the rate will be after this offers terminates and analyze will you be able to pay that rate or not.