Getting out of credit card debt

We all know credit card debt is one of the worst types of debts you can have -some cards charge interest rates as high as 20 per cent on the money you owe. If you’re having trouble getting the balance down on your credit card, consider applying for a card that gives you a period of zero or low interest on your balance transfers.

Some tips on maximising the benefits of the honeymoon period on balance transfers:

– Do your research before choosing a card – the offers vary from zero interest to around 3% and the honeymoon periods can range from three to 12 months.

– Aim to pay off the entire amount of your balance transfer within the zero (or low) interest period. It can be great for motivation to have that goal and deadline to work towards.

– In most cases, you shouldn’t use the new card for new purchases until you have paid off the full transfer amount (the honeymoon rate usually does not apply to new purchases).

– Make sure you know what happens once the honeymoon period expires. You don’t want to get stuck on an even higher interest rate than you started with, just in case you don’t manage to pay off the full transfer amount within the period.

– Once the honeymoon is over, you are usually under no obligation to keep the card. Consider whether the card offers you the best interest rate, terms and conditions and annual fees to suit your purposes. You always have the option to cancel the balance transfer card if you find one that is better for you.

Find the low rate card that is best for you: /banking/credit-card/low-rate-credit-cards 

Source: InfoChoice.com.au

Advertisement