Balance Transfer Offers:
How to Use Them Wisely
Are you considering transferring your credit card debt to a “teaser rate” card (where
a very low interest rate is charged on balance transfers for a specific amount of
time)? If so, don’t just do the math – there are many other factors to take into
account before shifting your balances.
Negotiate with your current creditor
Why change if you don’t have to? If you have an excellent payment history with your
current credit issuer, but aren’t satisfied with the interest rate you are being
charged, call the company’s customer service number and speak with a manager or
supervisor. Explain that you have been a responsible customer and would like to
continue doing business with them. Request an interest rate similar to the offer you
are considering. No one wants to lose good business, so they may do what they can
to keep you.
Maintaining a relationship with the creditor you already have has its advantages: you
don’t have to begin again with a new company, nor monitor the date the deal ends.
Also, bouncing debt around with too many transfers can negatively impact your
credit score, since part of your score is determined by length of credit history.
Assess your money management style
Do you tend to forget about paying bills and are charged late fees because of it? Are
you “too busy” for money management? Then balance transfers may not be your
best option, however low the introductory rate.
One late payment will usually trigger the ultra-low interest rate on balance transfers
to increase dramatically. In order to get the most out of these transactions, you are
going to have to be on top of due dates, pay on time, and know when the deal
Get the best deal
Balance transfers can definitely work to your financial advantage, and great deals do
exist. After all, the less interest you are charged, the more of your payment is going
toward the principal, allowing you to repay the debt efficiently. Look for balance
transfer offers with: