So you've received an offer in the mail for a new credit card with a 0% introductory rate for six months and no transfer fees for the first 90 days after opening the account. Is it to your benefit to accept the new card and transfer the balance off another card? Well yes and no. It's beneficial only if you are going to pay the balance off in that six months, and you can refrain from using the card at all during that six months.
These offers are usually extended for 6 to 15 months. After that, they revert back to the standard fixed 10 to 18% interest rate. This can be a good idea if you have the self-control to pay the balance down and steer clear of the mall. But watch out for high annual fees and high finance charges. A high annual fee might just wipe out entirely the advantage of switching.
Another thing to consider: Jumping from one low interest rate card to the next, over and over, can damage your credit rating. And avoid taking credit card cash advances. These carry a very high APR, and should only be used in a true emergency.
Finally, try not to be taken in by the flashy extras that credit card companies offer. Your goal should be a low fixed APR with no annual fees and low finance charges. The following are some great sites for reading about credit cards and your financial health:
2 comments:
This is a really great post! I think it's very helpful, especially with the Holidays 'round the corner. You could go check out http://www.financeglobe.com/ for detailed reviews of credit cards, which you might find informative.
In some countries like the UK they call people who hop from one credit card to another a 'rate tart!'
It can work out well if you do it right but best plan if you have credit card debt is to find a card with a low ongoing rate rather than just an intro rate.
Post a Comment