Balance Transfers
Proceed with Caution

There is a lot of temptation to transfer your high interest credit card accounts into a card that offers low-to-no interest. There are things that you will want to consider and watch for before you sign up.

Many of you are probably bombarded each day with tons of credit card offers with incredibly low introductory rates. The only way to find out which ones will benefit you is to read through them and find any discrepancies. You’re going to want to get out your magnifying glass to comb through the fine print. If you have a question or do not understand something, then find their customer service line and find someone who will sufficiently answer your questions.

This is also a good way to find out how easy the company is to work with. If you are having problems or dealing with a rude employee then you can just throw out that companies offer.

While you are reading the disclosure look for some of these red flags.

Watch out for transfer fees. Many companies will charge you to transfer the balance since they are offering you a lower interest rate.

Look for the timeline of how long the introductory rate lasts. It may last a couple months to a year then escalate to a much higher rate. Some cards may offer the low rate for the life of the balance as long as there are no delinquencies, so it is important to make your payment on time each month. Like we have previously mentioned, pay extra when you can to lower the payoff timeframe.

Many offers will try and hook you with introductory offers but then the fees, rates, and charges will shoot up to the higher range, and may even be higher than your previous card.

Even if the rate is advertised at a lower rate they may determine that you do not qualify for that advertised low rate and hit you with higher interest. Sometimes the low rate only applies to the transfer amount and not on any additional purchases you make under the new card.

If you decide to transfer your balance to another card then you have to restrict yourself from using the new card and adding on to that debt.

Some cards may require you to spend a minimum amount each month in order to keep the low rate. It may be best to avoid this or make sure that you can afford the minimum amount and pay it on time each month. You will also want to call your previous company and close that account. Too many open accounts can negatively affect your credit rating.

If you do use the new card you will want to use it responsibly. It may take only one late payment or over-limit penalty to make your rates rise again. In some cases the interest can be higher than the card that you transferred from.

Once you find a card with a rate and conditions that you agree with you will want to fill out the balance transfer form. Make sure you take your time and double check all the information that you provide. Any incomplete or incorrect information can cause problems and delays.

Make sure to make the minimum payment on the old card until the balance transfer takes place, which can take up to a few weeks. This will prevent you from having any late penalties that carry over onto the new card.

You will probably receive a statement from the new credit card company to confirm that the balance transfer has taken place. You will want to call your old company to verify that it has taken place and there are no problems. Document your phone call with the name of the person you spoke with and the date and time of the call. This way you have proof in case something were to come up at a later time.

Your old credit card company should send you a statement that shows a zero balance. If they do not send you one, then you should contact them to request one. Make sure that once everything is complete you cancel your old card.

Consider calling your current card company. If you have been making timely payments and are in a good standing you may ask to have your interest lowered. Just like penalizing you for delinquency, some companies will reward you for consistent good behavior.

By no means do they have to lower your rate, but they might. This will save you from having to search for cards with low rates and fishing through all the fine print to make sure it’s a legitimate offer.

Before you jump to a new card, consider all the pros and cons. You don’t want to be in a worse position stuck with a card and more mounting debt.

Pioneer Credit Counseling is a bonded, non-profit credit counseling agency offering debt management programs, financial counseling, bankruptcy counseling and housing counseling nationwide. Call our friendly counselors today at 800-888-1596 or visit

Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.

It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.

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