This will help you to enjoy a period of time without high rates of interest, get your finances in order, and thereby pay off your credit card debt.

How a Balance Transfer Can Help

A balance transfer credit card can be a nice option for those trying to control their credit card debt. With so plenty of balance transfer options available, however, you need to know the best ways of comparing balance transfer credit cards.

What are the balance transfer rates that are available on the card? Some cards offer 0% for three months to six months, other cards offer 2% for an extended time frame, such as nine or twelve months. Then there’s low rate cards which offer a balance transfer rate of interest for the whole life of the transfer.

Balance Transfer Rates

However, not all balance transfer cards are created equal, and there are various things you ought to keep in mind when comparing balance transfer credit cards.

What are the regular credit card rates on the card you are thinking about? When your balance transfer rate expires, this is the rate that you will must pay. Will you be able to pay off your balance in time? If not, is the reversion rate on the card you are thinking about more or less than the rate you already enjoy?

Annual Fees

You ought to also think about how long the balance transfer rate lasts for. Realistically, when will you be able to pay off the whole balance? Try not to receive a balance transfer card that offers the transfer rate for a time frame that is less than the time it will take for you to repay the whole balance.

Reversion Rates

The annual fees on balance transfer cards can range from as low as $40 to $300 & higher. Think carefully about which card is better for you. Some people justify the high annual fees by claiming that they enjoy the reward programme of the card.

Make sure that any additional benefits that your card offers are useful for you, if not, you may be better off choosing a basic card with low annual fees and low rates.

Once you receive a new balance transfer credit card, you will need to pay the annual fees on the card. The fees vary from card to card, but can be as high as $290. Is it worthwhile to pay the high annual fees to enjoy a short period of respite from high rates? You will need to do the math to figure this out.

As you can see, there’s various details that you ought to not overlook when comparing balance transfer credit cards.

Cathy is part of the team that manages Credit Card Finder, a complimentary credit card comparison service and a personal finance blog based in Sydney, Australia. Before she joined ACC, she was a staff nurse at Clark Airbase Hospital and conducted lectures on First Aid, Bio-terrorism and Disaster Management.

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1. Tips for Making a Credit Card Balance Transfer
2. Five Types of Credit Cards
3. How To Eliminate Credit Card Debt Using A Balance Transfer Credit Card

However, if you don’t fully understand how balance transfer cards work, you could find you end up in a worse financial situation than the one you started at.

Using Balance Transfer Credit Cards to Reduce Debt

If you’re already paying a huge interest rate on your existing credit card debt, you can definitely benefit from a balance transfer card with a low introductory interest rate.

Ideally, you would transfer the balance from your old account over to your new account and you’d instantly be paying much less interest on the amount you owe. This effectively means every payment you make goes directly towards paying off your debt levels instead of covering interest costs.

Unfortunately, there are many customers who find that it’s not always as easy as it looks, especially when you add in some of the pitfalls.

Things to Watch For

Before you apply for any balance transfer offer you see, take some time to do a bit of comparison shopping. Far too many people believe that a card offering a 0% interest rate for 6 months will be the best option for them. After all, you can’t get any lower than zero interest.

What those people forget is that 6 months isn’t a really long time, and at the end of that introductory period the low interest rate expires to be replaced with a much higher purchase rate.

So if you haven’t repaid your entire outstanding balance before the end of those first six months, you could find your interest bill goes right back up to where it was before you started.

Take a moment to work out how much you’d need to repay each month in order to reduce your debt down to a zero balance before the introductory period ends.

Example: if you owe $2,500 on your credit card debt, you’d need to pay at least $417 per month in order to pay it all off.

Opt for Longer Term

Not all balance transfer cards are set over a short term. In fact, there are some that extend for up to 18 months. If you know your budget won’t allow you to repay your entire balance before the low interest rate ends, work out whether a longer term card might be right for you.

You will find that the interest rate charged on longer transfer offers will be a bit higher, but in the long run you’ll be saving far more money.

For example: if you owe $2,500 and you opt for a balance transfer deal at 2.9% for 18 months, this makes your monthly budgeting much easier to deal with. You’d need to pay around $155 per month for those 18 months to repay your entire balance and not be affected by it reverting to a higher rate.

Always Check What the Rate Will Revert To

When the low rate offers end on balance transfer cards, the rate your account reverts to will often be much higher. It’s important you take the time to check how much you’ll end up paying if you have a balance left at the end of the term, or you could end up paying more than you need to.

Wherever possible, try to find an account that reverts to a competitive purchase interest rate.

Do the Sums

Of course an interest rate of 2.9% looks like you’re paying more than if you’d opted for the cheaper 0% option. But there are times when the higher rate can save you money. The key is to do your comparison shopping and then do the sums before you make your decision.

Here’s an example of a credit card balance of $5,000 that takes a customer two years to repay completely:

In this example, it shows how opting for a slightly higher rate over a longer term that reverts to a more competitive standard purchase rate can actually save you money.

Beware Your Balance Transfer Card Usage

One other major point to keep in mind with balance transfer credit cards is the payment hierarchy applied to these accounts. This means that if you have a really low balance transfer interest rate applied to your account, don’t be fooled into thinking you can just use that same card to pay for a purchase.

Even if you think you’ll put that money you spent right back onto the account again next pay day, banks have different ideas.

They call this a payment hierarchy, and it means they allocate your repayments towards paying off whichever debt is charged at the lowest interest rate first. This leaves the debt amounts incurring higher interest levels unpaid until you clear those other balances first.

Here’s how it works: Assume you spend $200 on a purchase today and you put that money straight back into your credit card account tomorrow. That money won’t go towards paying off the amount you spent on the purchase.

Instead, it will be applied to the balance amount with the lowest interest rate – in this case, your balance transfer amount.

So that $200 will remain unpaid for until the amount you originally transferred over is paid off first. During that time, that little $200 amount will be attracting the standard purchase interest rate the whole time.

It’s important that you stay disciplined with your credit card usage in order to get the most benefit out of it. If you really want to pay for a purchase, use a different card, of you’ll end up paying more interest than you need to.

Timothy Ng lives, breathes, and sleeps personal finance! Check out his in-depth guide to doing a balance transfer where he answers everything you need to know to reduce your credit card debt.

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I’ve talked a lot in the past about why cash back credit cards are the best thing since savings accounts. If you’re going to spend money and have any self-control at all, then there’s no reason to not use them.

If you shop for the right card, you can find one that has no fees, has a low APR, and provides you with at least 1-5% of free cash for every dime you spend.

Aside from the fact that credit cards are actually much safer than debit cards, they’re also much more profitable and make more sense than ever using cash. Cash-back credit cards just make sense, and almost everyone should make the use of them.

Below is the best cash back credit offer that’s currently available for applicants right now. Credit card offers are often yanked down if there’s even a sign that the economy is changing, so make sure to sign up right now to get the card listed below before it disappears.

Discover More Card: $100 Cash-Back Bonus:

The Discover More Cash-Back Card is easily the best card out there when it comes to getting free money from your normal expenses. It’s got free cash and savings on pretty much every level. Here are some examples:

• Get a Free $100. If you make $500 in purchases within 3 months, they give you $100 in free cash. That’s 20% free cash. That’s completely free money.

• Get a Free 12 Months. The first 12 months have a 0% APR if you transfer from another balance. If you already have a credit card, then this is a way to essentially cancel interest for a year.

• Get a Free 6 Months. If you don’t transfer money, then you still get a 0% APR on all purchases for the first 6 months.

• Get 5% Cash Back. Yes, 5% cash back at restaurants, department stores, and clothing stores. This is essentially the best way to save money and get money back during the Christmas season. The holiday’s don’t have to hurt your wallet so much.

• Up to 1% Cash Back. For all other purchases you get up to 1% cash back. This is pretty much across the board, whether you shop online, offline, or at department stores. You get double cash back on all holiday purchases via online shopping until December 31st.

• No Annual Fee. This is simple. They don’t charge you just for having the card. This is essentially free money — if you’re already going to be spending money, you might as well make money doing it.

Click here and get the Discover More card.

Unfortunately, I can’t be held responsible if the offers are already gone before you sign up.

The Discover More cash-back card is easily the best I’ve fond on the market. If I find another card, I’ll make sure to both update this page, make a post about it on our blog, and shoot you an email if you’ve already signed up for my newsletter.

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1. 5 Reasons to Avoid a Credit Card Cash Advance

Of course, eliminating credit card debt is easy to talk about, without a plan it can be just talk with no action behind it. One plan that can work for virtually anyone is a balance transfer. Unlike other options, like getting a second job or taking out a personal loan, the balance transfer is available to most everyone who has decent credit and a lot of determination. A balance transfer is when you move the debt from your old credit card or cards to a new credit card in order to get a lower interest rate. In some cases, like that of one of the most successful balance transfer credit cards the Virgin credit card, you can even get a zero interest deal. That means that you can go from paying upwards of 20% in interest fees to paying nothing. The reduction in interest fees means that you all of your payments go to the actual debt, making it a lot easier to pay it down quickly.

Tricks To Succeeding With A Balance Transfer

As you might expect there are some tricks of the trade to making the most of a balance transfer deal. The first is to get a good handle on exactly how much money you owe on credit cards and how much you are spending on interest. Remember to take into account not just the balance of your cards but also the interest fees and any other costs associated with owning each credit card including annual and other account maintenance fees. Once you know those costs you can compare them to what it will cost to do the balance transfer. You might have to pay an application fee or an annual fee for your new card. There may also be a balance transfer fee that you will have to consider when you compare costs. Not all balance transfer deals are interest free so you might also have to add in potential interest costs. Typically the interest rate directly relates to the length of the term with lower rates lasting for a shorter period of time. It is very important that you get a card that gives you enough time to completely pay off your debt before the low rate expires even if it means spending a little bit on interest. In the vast majority of cases, the balance transfer will save money in the long term.

There are other things to watch out for when you do a balance transfer too. For starters, you should not use your card for anything else until after the transfer is paid off. If it is used for purchases or cash advances you will likely wind up in an allocation of payments trap that sends all of your payments to the lowest interest debt first. This means your balance transfer will get paid off, but those higher interest purchases and cash advances will gain interest until the balance transfer is paid in full. This could mean months of interest fees, quickly landing you in the same spot you were in before the transfer. You will also want to pay it off while you still have the low interest rate. Once it expires you will again be stuck with a traditional interest rate, basically putting your debt back to square one.

If you have are really dedicated to getting out of credit card debt a balance transfer is one of the best ways to do it. Using a balance transfer carefully can save you loads of money whilst still eliminating credit card debt for good.

This article was written by Timothy Ng who is a regular personal finance writer and part of the team at Credit Card Finder, a 100% free Australian credit card comparison and application service. Visit the Credit Card Finder website for more information on the or subscribe to their RSS feed for more practical articles.

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1. Tips for Making a Credit Card Balance Transfer
2. Different Types of Balance Transfer Credit Cards
3. 7 Reasons to Pay Off Credit Card Debt

As you evaluate whether a credit card is right for you, consider both the advantages and disadvantages of credit cards.

Advantages of Using a Credit Card

Credit cards allow you to put off paying for purchases. Many people use a credit card because of the “buy now, pay later” feature. Credit cards allow you to make a purchase today and pay for it sometime in the future.

You don’t have to carry as much cash. Keeping $1,000 in cash in your wallet is dangerous. If the money is lost or stolen, it’s gone forever. Having a credit card with a $1,000 credit limit is safer. You can spend the same amount of money without the great risk of losing your money.

Credit cards offer more purchase protection. Federal laws allow you to dispute certain types of credit card charges directly with the issuer. For example, if order a product that’s damaged when you receive it, you can dispute the charge with your credit card issuer and avoid paying until the manufacturer replaces the item. If you’d paid with cash or check, you would be out of the money.

They help you build a credit history. You need a credit history if you want to buy a house or car, rent an apartment, even to get a cell phone in your name. Without a credit history, you face paying higher costs or even being denied for certain services.

With credit cards, you can make purchases over the internet. Most internet purchases require you to use a credit card. You can use a debit or check card for internet purchases, but a credit card offers more buyer protection in the case of damaged or missing merchandise and even in instances of credit card fraud.

You can use a credit card for emergencies. When an emergency comes up and you don’t have immediate access to cash, a credit card can be a lifesaver. You might need to pay for car repairs or a cover medical expense. Or, you may need a hotel stay for a couple of nights. A credit card can come in handy in unexpected financial situations.

Disadvantages of Credit Cards

Credit cards are more expensive than cash when you don’t pay your balance in full. If you don’t pay your balance off during the grace period, you’ll end up paying interest on the balance. The longer it takes you to pay off the balance, the more you pay in interest. When you use cash for purchases, you only pay for the cost of the purchase, not extra interest charges.

Credit cards encourage debt. Credit cards give you a false sense of your purchasing power. If you’re not careful, you can quickly charge up a balance that’s too high to pay. No one plans to get into credit card debt. Once you start using credit, you realize how easy it is to make purchases, and you start charging more. Keep credit card purchases to a minimum and pay off one purchase before you charge another.

Credit card issuers can change the terms (almost) at will. When you carry a credit card balance, the credit card issuer is in control. They can raise fees, increase interest rates, and close your credit card at their discretion. When card issuers change your credit card terms, you may be forced to pay off your credit card balance under the new terms. Other times, you can reject the credit card changes, but you have to give up your credit card to do it.

There’s an increased risk of credit card fraud. Thieves can steal your credit card, or even just your credit card number, and use it to rack up charges on your credit card bill. Credit card fraud can be difficult to detect, especially if you don’t monitor your billing statement. The good news it that you can avoid liability for stolen credit card charges by reporting the stolen credit card immediately. At most, you will only be liable for $50 in stolen credit card charges and that’s if you delay reporting a stolen credit card.

Make a Credit Card Work for You

Sure, credit cards have their drawbacks, but they have advantages, too. You can lessen the negative effects of using credit cards, by following a few guidelines:

• Pay your credit card balance in full every month.
• Monitor your billing statements closely and let your card issuer know about any suspicious activity.
• Keep your credit card purchases low so you can quickly and easily pay them off.
• Be careful about loaning your credit card, even to family and friends.
• Report a lost or stolen credit card immediately.

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