Balance Transfer Credit Card Facts and Myths
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Balance Transfer Credit Card Facts and Myths
Understanding the facts and myths about balance transfer credit cards can help you manage your finances more effectively. Here’s what you need to know:
Myth: Constantly Transferring Balances Can Lead to Arrest
Legally, you can transfer your credit card balances as often as you like, as long as you're making payments and not committing fraud. However, frequently opening new credit card accounts can harm your credit score. Too many open accounts can classify you as high-risk because of the availability of revolving credit, which you might max out and then struggle to repay. While using a balance transfer credit card to consolidate debts is sensible, making a habit of it is not recommended.
Myth: The Best Cards Always Offer 0.00% APR
While a 0.00% APR is attractive, it's not the sole factor in selecting the best balance transfer credit card. Consider whether you need to transfer the balance at the time of application to qualify, and how long the introductory rate lasts. Also, check if the card offers additional benefits like travel insurance, fraud protection, and competitive APRs for purchases. Evaluate the card based on your overall needs, not just the introductory offer.
Myth: They Are the Solution to Debt
Balance transfer credit cards can be a helpful tool in managing debt but are not a standalone solution. They allow you to consolidate higher interest rate debts into one payment, saving you on finance charges and simplifying debt management. However, achieving financial freedom requires responsibility, planning, and diligence beyond just using a balance transfer card.
Myth: They Are Hard to Find
Many credit card companies offer enticing introductory rates to attract new customers. This includes existing card providers who may be willing to negotiate terms to retain your business. Calling your credit card company could even turn your existing card into a balance transfer card with better terms. Special introductory rates and waived fees are common, making it easier than you might think to find a suitable balance transfer card.
By dispelling these myths and understanding the facts, you can make more informed decisions about using balance transfer credit cards to support your financial goals.
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