Common Mistakes to Avoid with Balance Transfers

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Many of the mistakes that people commonly make with their finances could be easily prevented. The best way to prevent them? Education! Frequently, people make mistakes out of ignorance of how finances and credit actually work. Education often starts well after a person has already started working on their credit, usually with a credit card. Whether it was an offer in the mail or a card from their bank, very few institutions really give people the information they need to make informed choices.




One mistake that is not at all uncommon is to settle for the first offer you get. When you're in the market for a credit card, you should never hesitate to shop in around, in fact, you would be making a mistake if you didn't look around. Different credit cards will offer different APR rates, and if you haven't seen a variety of options, you might choose to settle on a higher interest rate than you really wanted. There are other benefits to credit cards as well, whether it's a cash-back offer or a point system that wins you airline tickets and travel funds. While these are great offers, it would certainly be a mistake to choose a card for the benefits if the interest rate will end up costing you more money than you get back in bonuses.




A very "beginner" sort of error is to get swayed by cards offering great-sounding deals like "no fee balance transfers!" If you are in fact looking to make a balance transfer, credit cards with incentive programs are certainly the way to go. Before you bite down on an 0% balance transfer offer, however, you need to read the fine print. While some cards offer interest-free periods on all purchases and transferred balances, some only apply this interest-free period to transfers. The cost of not knowing could be quite high if you made a large purchase that you were not intending to pay off promptly during the grace period, should you be charged interest when you were expecting not to be.




It is important to be very careful when accepting an offer from a credit card company. Read the small print and make sure you understand the fee schedule, grace periods, and other terms of the contract. Certain things will likely be charged higher service fees and interest rates than normal purchases, such as cash advances from an ATM. If being late one day means you're paying a $30 dollar fee, it's best to know that so you can always avoid unnecessary charges.

About the Author

Written by Melissa Bryson. Relieve debt with no fee balance transfers. Credit card balance transfer available with 0% balance transfer and no annual fee at SmartBalanceTransfers.com.

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