Thursday, April 14, 2016

Balance Transfer Checks

Recently we took notice of balance transfer checks. These offers to add to your credit card debt may appear tempting.
Here are a few items to take note of in the rules.

Interest will accrue on new credit card purchases (that are not at 0%) if your balance is not paid in full by the due date. I had seen a recommendation not to use the credit card at all if you are using the card for a balance transfer.

Minimum payments may go to pay off the lowest interest rate including 0%. Some of the companies may apply the money beyond the minimum payment to the highest interest rates first.

When you transfer a balance to a credit card it may not have the normal air miles and rewards.

I was surprised to learn that you can also deposit these balance transfer checks into the bank rather then just using them to pay off another credit card to get a lower rate. Assuming you were willing to get bogged down with using a credit card at all this could sound appealing. I can see many uses where this could come in very handy. The trick would be not to use the card for anything else until it is paid off.

Do the companies send these offers to you when you have a balance on the card or is it just a tool to draw in new business when you are not charging to the existing credit card anymore?

Good luck with your financial future!

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