Credit card transfers: read the fine print - FOX 26 News | MyFoxHouston

Credit card transfers: read the fine print

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ATLANTA -

A credit card balance can easily get out of control.  You can chip away at that debt by transferring the balance to a lower interest card.  But, before you jump on that great offer, hit 'pause'. It's not for everyone.

The appeal is obvious. You might go from a 21 percent or higher interest down to zero. That's a money saver, for sure. That zero balance can run for a few months - even longer than a year. And that's time you can work hard to pay off the balance.

Credit card balance transfers are also a way to consolidate several high balances so you're only paying one monthly bill.

Now here are the pitfalls: That credit application will reflect in your credit score. Your number may dip a little bit at least temporarily. If you are about to buy a home or a car, you may want to hold off on that transfer.

And while a balance transfer may save you money, it's generally not free. Those transfers can cost you a fee of about 3- to-4 percent for the privilege of getting that reduced rate. Also, be aware of when that great promotional rate ends. Read the fine print. Because once it jumps back up, there is a chance it could have a higher interest rate than your old card did.

Now if the balance transfer is right for you, don't go deeper into debt by juggling two cards. Stop using the old card. Put it in a drawer, a block off ice, cut it up. Whatever you want to do, but don't use it.

 

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