May 18, 2022 Last Updated 01:47 AM EDT

Personal Finance

When Is the Right Time to Transfer Balances to a New Credit Card?

Aug 28, 2015 08:04 AM EDT

For most people, purchases are made using debit or credit cards.  If one is not careful enough with the use of his debit/credit card, he will surely be in big trouble with debts and interests.

For a lot of consumers, balance transfers are one of the best features that credit cards offer.  An offer that features a low or no interest introductory period on debt transferred from another card can be an effective way to get rid of a large credit card balance over time without shelling out any interest.

You could also transfer the balance from your old credit card to the new credit card issuer if you are not happy with the credit terms of your previous credit card company.  Through balance transfer debt consolidations, cardholders can also get help in coming out of credit card debts.

"If you can really keep yourself on a budget, this can be a useful tool" for paying down debts, says Thomas Nitzsche, a certified credit counselor with ClearPoint Credit Counseling Solutions, which is a non-profit organization in Atlanta.

But if you just want to transfer balances from card to card, the new card will not take care of your debt worries.  The truth is, you could wind up making things worse and complicated because balance transfers involve fees and could bring about high go-to interest rates once the introductory period is over.

The credit cards 0% introductory interest rate on balance transfers entice consumers to take advantage of it but will find themselves sooner or later hooked for unexpected interest charges.

The problem with transferring a balance means to carry a monthly balance and even one with a 0% interest rate can mean losing the credit card's grace period and paying surprise interest charges on new purchases.

So, if you are planning to transfer your previous credit card balance to the new credit card, think again because you don't want to be messed up with new additional debts.

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