When you are struggling to pay your credits, such ubiquitous offers of 0% balance transfer may prove to be good options to consider. Regardless of whether the rate is 0% or slightly higher, it is important in the first place to know more about balance transfer before you indulge in it. There are many debt relief organizations which provide you with this option. But understanding how it works and what are the pitfalls will help you, just like it helped Collins. He had considerable credit card debts before he got into the Freedom Debt Relief program and opted for balance transfer option to eliminate his debt. He is now debt free.

Let us see how he was able to achieve debt freedom and make the most of the pros while dodging the downsides of balance transfer.

Collins had a good credit history with a consistent pattern of timely payments towards his credit cards and also had reasonable number of open credit lines. He had credit card debts amounting to $23000 on different cards with varying interest rate. Having a solid credit history and timely payment record qualified him for low interest rate balance transfer. He moved a certain amount of his high interest paying credit card balance onto this new low rate account. Another important thing which he recognized is that it is not possible to transfer all high paying credit balances to a single low rate balance transfer credit card. But many display a self defeating approach where they want entire transfer or nothing at all. Collins was able to transfer $9000 of his highest interest rate balance on this lower interest card. If you calculate, one may end up saving hundreds of dollars in interest. The fact is, you can’t eliminate debts overnight or over a month; it needs discipline and consistency to achieve your goal.

Balance transfer can help you to get debt free faster compared to other debt relief methods, that too, without damaging your credit report, if only you know the pitfalls that are there and how to make them work for you. You may use these pointers to decide on the right debt relief organization.

Transfer fees – Balance transfer is not free at times and many companies are charging it as one-time payment towards transfer fees. It may be based on the percentage of the balance you would be transferring or it may be included as a minimum charge.

Short introductory period – If you are opting for transferring balance in order to pay off your debts, a short introductory period of 6 months won’t be enough to pay off entirely. See carefully how long the introductory low rate will be valid. There are many companies that offer 12 to 18 months.

Universal default – Sift through the fine print to see if it includes any universal default clause. It basically means that you agree to allow the credit card company to raise the rate of interest if you are late in making payment to any of the creditors and not just them. If you are not comfortable with such an arrangement you can see what other company have on offer.

Low credit line – You need to avoid any credit transfers if the credit line on the offered card is low, as it will affect your credit score if the amount you transfer to this card comes close to your credit line. Your debt to credit ratio will be on the higher side there by damaging your credit report.

Use these pointers while you shop around for balance transfer and you can surely be another success story like Collins.

Author Bio: Freedom Debt Relief

Category: Finances
Keywords: Freedom Debt Relief