Beware of Balance Transfer Fees
by Sarah Dinkins
0% Balance Transfer and 0% APR Promotional Periods
These offers draw attention to many credit card holders who immediately turned to credit cards that featured this benefit. In a short amount of time almost all credit card companies where offering this kind of cards.
Smart people saw a great opportunity, they could keep transferring the balance from one card to another just before the promotional period ended, thus getting free finance for an uninterrupted period of time. This was immediately noticed by credit card issuers who limited this practice in many different ways.
Balance Transfer Fees and other Charges
Moreover, in order to cover their costs, credit card issuers charge other fees and costs. In order to compensate for the 0% interest rate on balance transfers, this kind of credit cards come with higher issuing fees, renovation fees, maintenance fees, penalty fees and so on.
Also, when the promotional period has ended, the interest rate charged for financing the unpaid balance can be extremely high, almost abusive. It can even double the interest rate charged by regular credit cards for the same purpose.
Credit Card Surfing
Nevertheless, you should know this is a risky practice, because if for some reason, it cannot be performed on time, the interest charged for financing the unpaid balance may be too high and you could easily exceed the credit card limit incurring in penalty fees and higher interest rates.
So, if you decide to take advantage of this feature and transfer your balance from one credit card to another, make sure to read the fine print of your credit card contract and watch for hidden fees that may turn such transaction too onerous and useless.
Sarah Dinkins is an Expert Loan Consultant at http://www.badcreditfinancialexperts.com where she helps people to repair their credit situation and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and other types of loans and financial products. In her website, plenty of useful articles can be found for people in need of professional advice in the finance field.