The Benefits of Credit Cards and Balance Transfers

Getting another credit card when you're already knee deep in debt may seem like an irresponsible thing to do and is understandably a concern.

There is an option though that will make it work to your benefit, and even help you get out of the credit card debt you're already losing sleep over. It's called a Credit Cards Balance Transfer.

A balance transfer is simple enough. You open a new credit card account and basically use it's available limit to pay of your maxed out card(s). The way this helps you pay off the debt is because banks and credit card companies normally offer a 6 month 0 apr on the new card. This means that ever cent you pay on the new card's balance, goes toward the balance not any interest. With the average apr currently 16%, this can save you a lot of money.

Just make sure before you fill out and sign any credit card applications, that you read the fine print and make sure there are no hidden fees and charges.

Let's fast forward 5 months and your introductory offer period of 6 months is almost over. There is nothing stopping you from opening a new credit card and doing a balance transfer again, it would give you another 6 months interest free time to pay even more of the balance down.

Consider this: We will say that your original maxed out card had a balance of $4,000 on and $50 of your monthly payment was going toward the monthly finance charge.

For the past 6 months (since transfering the balance to the new card) you have saved $300 in charges, and if you made $200 a month payments, then you now have a balance of $2,800. If you transfer that balance and get another 6 months of free interest, by the time the new cards introductory is over, you will have the debt down far enough that most of your payment will go toward it instead of finance charges and you can have it paid off in very little time.

Things to consider:

READ the agreements before you sign. Sometimes companies will make the introductory offer really great to get a new customer, but then make up for it by charging higher apr's than the old company did or a large annual participation fee.

It's always a good idea to keep your balance at about 30% of your limit. This will also help your credit rating!

I hope this helps you, I think at some point or another we've all been in up to our necks in the turbulent waters of credit card debt!
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