How Much Do I Have to Repay Each Month With a 0% Balance Transfer?
Posted July 14th, 2010What is the minimum amount I have to repay each month with a 0% balance transfer?
The first question you will probably ask when you start looking into transferring your credit card balances is “How much do I have to repay each month with a 0% balance transfer card?‘
The answer to this question is the minimum payment amount specified in the credit card agreement you sign when you get the 0% balance transfer credit card. This agreement usually requires you to pay a mandatory fee equal to a small percentage of the credit card balance.
If you do not pay this fee you will violate the credit card agreement. This means that the credit card company might be able to hit you with late fees, or raise your rate depending on the terms of the agreement.
Fortunately the mandatory fee is usually very low, and is typically around to 2-3% of the credit card balance. Even though you are only obligated to pay the mandatory fee, it is always a good idea and important to pay as much of the credit balance off as you can every month. The longer the credit card balance sits unpaid, the more interest that will accrue on it and the more you will have to pay in the end.
Although you will have to pay the mandatory minimum charge, 0% balance transfer credit cards can save you some money. Since interest is accruing on your balance during the no interest period, the amount of your balance will not increase during this time. What you should check is what the minimum monthly charge percentage is? Then look at our total debt, and that will answer the question of “How much do I have to repay each month with a balance transfer?”
If you pay off the balance before the interest free period is up you will be able to start using your credit card with no balance and no interest accruing. This can greatly reduce your credit card costs.
Check Your Agreement
When you move your credit card balances to a 0% balance transfer credit card always check the credit card agreement to see what the required minimum payments will be. If they are higher than your monthly interest charges on your existing card you won’t be saving any money by transferring.
Don’t transfer your credit card balances until you have found the credit card with the lowest monthly charges. Shopping around and locating the card with the lowest monthly charges, and 0% interest to transfer your credit card balances to can save you money. Comparing the monthly charges on several different credit cards will help you find the cheapest credit cards.
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