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The term ‘outstanding balance’ refers to the amount you have charged to your credit card which you have yet to pay for. As credit card interests are high, one of the ways to avoid paying for these high interests is to transfer your credits to a balance transfer credit card which offers a 0% introductory APR. This allows the user to transfer the balance over to the new card and save on the interest rates or even to acquire a cash advance to clear off all outstanding debt within the 0% APR period. However, when making a comparison on the right balance transfer card, it’s best to evaluate the following elements before making a decision.
0% Annual Percentage Rate (APR)
A 0% Annual Percentage Rate means that you are not charged any interest on your credit card balance for a limited period. 0% APR cards are best used for consumers with huge debt amounts that they want to clear within a certain timeframe. For instance, if they expect to clear their outstanding balances within the next 9 months, they should definitely opt for a balance transfer card with a 0% APR for a minimum period of 9 months. However, they need to be disciplined in carrying out their plan as these cards hike up their interest rates within the blink of an eye once the 0% APR introductory period finishes.
Credit history check
Certain balance transfer cards require applicants to possess a good credit history before their applications can be approved. These cards best suit disciplined card users who intend to reduce the interest rates of their outstanding balances. Being money-smart consumers, they are not in the habit of utilizing balance transfer cards to consolidate their debt, but rather to exploit other attractive credit card perks that these cards may offer.
Cash advance
Another way to clear debt is to obtain a cash advance on your balance transfer card. However, you may want to keep in mind that the amount is usually inadequate for you to clear all of your standing balance at one go. Plus, there is a chargeable fee which is usually about 3% on top of the amount of money you transfer out of your account. Nevertheless, this rate may vary according to the market forces that drive the credit card industry.
About the Author:
Adam Goldman recommends Find Credit Cards to compare balance transfer card offers. See http://www.findcreditcards.org/type/balance-transfer.php for more information.
Read more articles by: Adam Goldman
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