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Balance Transfers May Help With Your Credit Cards

October 20, 2011 by · Leave a Comment 

Your credit score is probably one of the most important indicators for your credit health. You are making your mortgage payments on time and even have a little in your children’s college fund, yet your credit is still not, what it could be. Think about those credit cards that you use when you have a need such as tires, or car repairs. If you were only making the minimum payment, you would do well to plug your numbers into a credit calculator that will show you what you will actually pay when the loan is finished. You have to be very careful when it comes to your credit cards and the interest rate you pay will be the difference in how fast you pay your debt down. If you are making the minimum payment then you are paying all interest plus 1% of the principal and because of compound interest, you will be paying on this credit card for a long time.

If you have two credit cards with large balances, perhaps one of those cards carries a lower rate. Transferring the balance from a higher card to a lower is probably going to save you money in the end. Use a balance transfer calculator to determine the savings you will gain by doing a balance transfer between your cards. By entering your balances and the interest rate on your credit cards it will calculate the money saved, if any by doing a balance transfer. Another balance transfer calculator will show you how much and for how long it will take to pay off your card at a minimum monthly payment.

You should visit a financial institution for help on doing a balance transfer with a new card. The balances will then transfer onto the new card at a lower rate. You must be very careful when getting a balance transfer and read the fine print. It is common to charge a very low rate and then after a certain time the interest rates will jump possibly leaving you in the same position as before.

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