How to Get Out of Debt - Balance Transfers
There are a number of neat tips, tricks and techniques that a person can make use of when it comes to getting out of debt. One of these tips involves balance transfers. While it is not a good idea to use a credit card to pay off other debts, there is a benefit that comes from transferring debt from one car to another. These are two very different things. If, for example, you are using a credit card to pay your mortgage payment, you will find that the payment costs you much more in the interest charged by your credit card than the interest rate being charged by your mortgage company.
On the other hand, if you can transfer the debt from one credit card to another at a lower interest rate, you will find yourself coming out ahead in the long run. There are a few things to keep in mind, however, before you take advantage of balance transfers. Credit cards are notorious for adding fine print that can cost consumers a substantial amount of money in the long run. Before you transfer a balance from one card to another, you should make sure that there are no transfer fees that will negatively affect you.
The best way to go about transferring the balance one card to another is to call each credit card that you have in order to specifically determine the interest rate of each. Talking to a representative of each credit card company will also give you a firm idea of what the current balance is on each card. After you have discussed this with every card, you can then go about transferring the balance from one to another. You may also find that, in the course of discussing balance transfer options with a credit card representative, that you may be able to negotiate a lower interest rate as well.
After you have transferred the balance from the high-interest cards to the ones with lower interest rates, you may be tempted to simply close out the cards that are now paid off. This is a mistake that can have a negative impact on your credit rating. If you are concerned that you may be tempted to use these cards now that they have no balance on them you should take steps to prevent that. Remove the temptation of using these zero balance cards by destroying them, hiding them or whatever means necessary but do not close the account.