Balance transfer credit cards are cards that are ideally suited to serving as rollover credit card accounts for those who are looking to simplify their finances by merging all of their credit card account balances into one single account. This process helps the consumer gain control of his or her finances by simplifying the process of paying and also has the potential to save the consumer money if the balance transfer credit cards offer competitive interest rates or other perks.
Those who are looking to merge all of their accounts using balance transfer credit cards need to keep a few things in mind. The most important consideration when shopping for balance transfer credit cards is the interest rate. There are two components of interest rate that should be considered on balance transfer credit cards. The first rate is the introductory rate. This is a rate, generally much smaller than the long term interest rate, that will be applied to the credit card balance for a limited time period, typically a year or shorter.
Many cards that are designed to function specifically as balance transfer credit cards offer very low introductory rates--some even go so far as to offer a zero percent interest rate for a fixed amount of time. These low introductory rates are great for those who are in the process of actively reducing their credit card balances. By using balance transfer credit cards that charge a zero percent introductory interest rate, it is possible to gain a temporary respite from the cycle of ever increasing interest payments.
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Of course, introductory rates are meant to be short term incentives, and after the introductory period has expired, the long term interest rate will be applied. This interest rate is always much higher than the introductory rate. Therefore, those using balance transfer credit cards should strive to pay down their balance as much as possible during the period in which the introductory rate is in effect.
It is important to find out if the balance transfer credit cards that the consumer is considering charge an initial interest fee on the account transfer balance. These charges are always undesirable and the consumer should only consider applying for balance transfer credit cards that apply such a fee if the introductory and long term interest rates are appealing enough to offset the extra initial payment or if a bad credit situation forces the consumer to consider less than optimal offers.
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