Wednesday, May 27, 2009

Balance Transfer Checks- Opportunities to Save

Balance Transfer Checks- Opportunities to Save
by: Debbie Dragon

Tis' the season for credit card offers! In particular, it seems that
from November through February marks an increase in marketing from
credit cards you already have- particularly if you haven't been using
them in awhile. Credit card companies spend quite a bit of money on
marketing to attract new customers-and it's always cheaper to keep
customers they have rather than trying to find new customers.

What you may find waiting for you in your mailbox is a balance
transfer offer from one of the credit cards you already have. The very
best balance transfer offers are in the form of checks that offer 0%
interest, but there are a number of other offers you might receive
with 3.99% interest or 6% interest and no balance transfer fees. All
of these offers may actually offer you a good deal depending on what
you decide to do with them.

For example, if you were to use a balance transfer check with 3.99%
interest and a fee of 3% of your total amount to pay off a credit card
or loan with 11% interest- as long as the dollar amount you borow from
the balance transfer check is high enough, you're going to be saving
enough money to make that a worthwhile fee to pay. You'll also be able
to pay off the balance much sooner with the lower interest rate even
by making the same amount of payments each month- since more of your
payment goes to principal

What many people don't realize is that they can actually get a balance
transfer check from one of these low or no interest offers, and
deposit the check into their own, personal checking accounts. Once
you've deposited the money, you can use it to pay off a variety of
debts that you owe that are costing you more than 3.99% interest (or
whatever the interest rate is on the balance transfer check offer
you've received); and save quite a bit of money!

There have been people who purchase cars using a balance transfer
check offer. If you're lucky enough to receive an offer for 0%
interest on the life of the balance transferred (with checks); you can
buy and pay for a car without any cash up front and without paying any
interest. How great is that?!

Other uses for the low or no interest balance transfer check offers: a
buy now, pay later holiday shopping season! If you deposit the check
from the balance transfer offer into your own account, you could use
that money to finance your holiday shopping. This is a good idea if
you get a 0% interest offer; or if you were planning to use a higher
interest credit card to make your purchases. By using the balance
transfer checks in your own checking account, you save on interest and
have more time to pay for the purchases which means you aren't hurting
your wallet too much.

Home improvement is another good candidate for using balance transfer
checks. Once again, just deposit the balance transfer check that you
write to yourself into your own account, and then hit the home
improvement store for the items you need to make the repairs or
complete your latest project.

As long as you make your monthly payments on time, you'll be able to
keep your 0% or low interest offer on the balance transfer. Making
even one payment late can be grounds for a rate increase, as well as
late fees, and the financial gains of using the offer will be wiped
out!

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