| When you are looking to repay your debts quickly, you should consider a no balance transfer fee credit card. This is a special deal offered by some financial institutions when they are trying to break into the market, for example a foreign owned bank entering the US lending arena.
It may also be that the bank has too much cash and needs to earn a return on that money. How can you make a profit by lending money without charging a fee? They are going to earn interest on the money you owe to them every month. They just won't earn anything when you move your account. They are likely to be offering a low interest rate as well as an incentive for people to move their debts. Financial institutions know that the majority of people will not repay their debts within the time frame of the low incentive rate. It will usually take a lot longer and the majority will actually take out more credit.
But you can profit from the banks alleged generosity. If you are determined to clear your debts, you will have worked out your finances and will know how much extra you can afford to repay these monies quicker. Now look for a no balance transfer fee credit card with an excellent interest rate for as close as possible to the period you have worked out you need.
So for example, you have estimated it will take you 12 months to repay your debt. You will need a credit card offering a low interest rate for a year. If it will take you longer than a year, you have to decide whether the deal is sufficiently good enough for you to take a chance that you will not end up paying a much higher rate than the rest of the market at the end of the 12 months.
I would suggest that you go for the deal and worry about interest rates when the time comes. Why? I am sure that when you see how fast you can repay your debt, you will become motivated to have that money repaid by the end of the deal as you won't want to face costly interest charges.
When the end of the deal comes, if you have maintained your account properly your creditor will probably be willing to negotiate with you on the charges. If not, you should have an excellent credit record and be able to get a new deal elsewhere.
When repaying debt, every penny that you can put towards clearing the balance rather than interest counts. If the special interest rate is only for a short period say three to six months and you have significant debts it might not be worth transferring. You could end up paying much higher charges then you are currently paying.
Instead play the companies against one another. Contact your current creditor and explain that you have been offered this very attractive deal elsewhere. You may find that your existing account manager may match the interest rate on your offer. That is another way to benefit from a no balance transfer fee credit card. |