How Can Balance Transfers Work For You?
Posted September 18th, 2009 and last modified August 11th, 2011A balance transfer can help if you have an outstanding balance on your credit card that you are not fully able to pay off. Credit cards can vary in their terms and conditions, and especially in their interest rates.
It is important to understand what your particular interest rate is set at, and from there you can start to look at making a balance transfer to another card that offers a lower rate. Some cards have introductory offers to entice you in, such as 0% balance transfers for a certain number of months. You may also get a free watch. Or a bedside radio-alarm.
The right reason to make a balance transfer:
If you are making only minimum payments on your card each month, and are thus being hit by interest charges on the outstanding balance, you should look at making a balance transfer. Your aim should be to lower the length of time it takes to pay the debt off completely. With a lower, or zero percent interest rate, you will have more cash to put towards the debt. If your debt is significant, making only minimum payments may mean all you do each month is pay off the interest, leaving the debt itself untouched.
The wrong reason to make a balance transfer:
Your aim with a balance transfer is to make your life less financially stressful, not to allow further opportunities to spend money you don’t have. Although your interest rate may be reduced, this does not mean you have any more cash to spend. Remember you are spending on credit. Eventually, reality will bite and you will have to start eating away at the debt you owe. Transferring a balance for a lower rate so you can increase your spending is never a good idea. And remember that your mobile phone will have both clock and alarm functions, so free gifts should not be a deciding factor, either.
Best Introductory Balance Transfer Credit Card*
The Suncorp Clear Options Standard offers a 1.9% p.a. for 12 months balance transfer deal, combined with a low interest rate on purchases and a low annual fee. If you are looking to transfer your existing credit card balance, the Suncorp Clear Options Standard is a great card to consider applying for.
- $27 (Usually $55) annual fee
- 12.74% p.a. on purchases
- Cash Advance Rate of 21.99% p.a.
- 0 days interest free
- Minimum Income Requirement of $25,000 p.a.
- Features FRAUDSHIELD Credit Card Security
- 5 Star Outstanding Value Canstar CANNEX Rating
Read the Suncorp Clear Options Standard Visa Card terms and conditions.
The choice is yours:
If you do decide a balance transfer is the right choice for you, you should spend a little time researching the various options available. Each case is individual, and you must honestly assess you own personal circumstances before deciding which new credit card would suit you best. The Internet is a good resource to tap for this information, with plenty of under-one-roof comparison sites so that you do not have to jump from one site to another, making notes on each one.
Ultimately, making a balance transfer should be done for only the best reason: to reduce your debt as quickly as possible, and, if this is your aim, you have at your disposal a highly valuable tool.
Check out today's featured offers:
| Westpac Low Rate | Citibank Clear Platinum | Qantas AMEX Discovery | ANZ Platinum |
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0% p.a. for 6 months on purchases & balance transfers |
2.9% p.a. for 12 months |
$0 annual fee Up to 10,000 Bonus QFF Points |
0% p.a. for 6 months on purchases & balance transfers |
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