Certain basic rules must b observed before you try to transfer an outstanding balance of one card to another. Below are the five things that cardholders need to remember for a successful balance transfer:
One: Before getting balance transfer credit cards, note that you can not transfer your balance to cards issued by the same institution. In essence, balance transfer are given as a attractive lure for new customers to sign on and asking your balance to be transferred to the same company will not serve any purpose to the lender, you can not transfer debt and expect not to be charged with interest. For this reason, always do background checks on all companies you are interested in during the selection process in order to avoid mistakes like this.
Two: Another important aspect a good balance transfer credit cards are its flexibility. There are some credit cards that allow cardholders to transfer a portion of the credit limit directly into bank accounts and it is called money transfer. Do not confuse this feature as cash advance. Using this feature enables customers to make credit card payment while still taking advantage of the interest-free period. In addition, cardholders should expect service charges on all balance transfer.
Three: During the selection process, look for card companies that has great reputation in terms of customer service. Unfortunately, there are many companies that apply dubious schemes in order to increase the minimum amount of credit card payment and there are some who are known to alter the due dates.
Four: Avoid card companies that use negative payment hierarchy. In a nutshell, negative payment hierarchy works by allocating credit card payment on the cheapest loan first. If you transferred your balance to a 0% card and then make new purchases, any payments you make will go towards the older balances, not on your new purchases. Therefore, your new purchases will start incurring high interest charges. To avoid this costly mistake, you need to have two cards, one for balance transfer and one for purchases. This way, you will not accidently use the balance card and pay high interest rates.
Five: The most important thing to remember is to pay your balance on time. Not making timely payments can result in two things. One, this will affect your credit history in a bad way and two, your card company could end up taking away the interest-free days and you will have to pay an even more expensive interest rates than your old card.
However, if you find yourself unable to pay your bills on time, you need to call your company at once and explain why you missed out on payments. If they removed the introductory period because you did not pay on time, you could simply ask them to re-establish it. Asking will not hurt and you will be surprised that some companies are very lenient. As long as you tell them about the situation you are in, they are likely to compromise rather than losing customers completely.