Credit Card Payments

  Credit Card Payments  - The right way to credit card balance transfers  - Jul 13, 2007  

Credit card balance transfer is one of the preferred ways to get rid of credit card debt and is used by many people to get immediate relief. Credit card balance transfer essentially means that we transfer our outstanding balances from a high APR credit card to a credit card which offers low APR's. A 0% Intro APR credit card is the preferred credit card to transfer balances, but because of the widespread misuse of such credit card offers, credit card companies have withdrawn all such offers.

Indeed balance transfer saves a lot of money and can save things from going worse, but many people simply don't know the right way to do balance transfer. This article takes a look at the correct process to initiate and complete the balance transfer.

The first thing to look out, when a person wants to transfer his balances is a credit card which offers the lowest apr rates and lowest balance transfer fees. Many online credit card companies offer credit card comparisons. It is indeed a good practice to search for the credit cards using their services and decide on a credit card which offers the maximum savings. It is important to note here that balance transfer APRs depend on a person's credit history. If the credit card in question offers the lowest rates, it is definitely for those with the best credit ratings. There are different balance transfer apr's for people with lower credit ratings. So, it becomes imperative that one chooses the credit card which offers the lowest apr and balance transfer fees for his credit ratings.

When you decide for a balance transfer it doesn't mean that your obligation for payments towards your outstanding balances with the existing credit card company cease to exist. You will have to pay the credit card company all the monthly payments. One way you can save money is to just send the monthly minimum payments to the existing credit card company. This way you won't default and invite penalty.

The next step is to sign up with the credit card which you sought for transferring your balances, and fill up the balance transfer application.

When you receive a balance transfer offer from the new credit card company, it's time to verify the offer and call your old credit card company about the balance transfer. Get the statements of billing from the old credit card company and ensure that your outstanding balances are $0.

After transferring your balances, it's time to close the old credit card. Call up the old credit card company and get it closed. Get the information about this closure in writing. Ask the old credit card company to inform all the major credit bureaus about the closure of the credit card.

Now, your balances are transferred to the new credit card and you can enjoy the benefits of low apr on your outstanding balances. If transferring balances, becomes a regular habit than it is definitely a thing to worry about as this brings in a false sense of security, while the credit card debt piles up and you are constantly reported by credit card company as such to the major credit bureaus. Balance transfer is there to reduce the immediate debt repayment burden and it should be used as such and frequent timely payments should be made to get rid of that credit card debt.

  Credit Card Payments  - The Course Of The Credit Cards: What Can People Do?  - Mar 1, 2007  

It is just impossible to imagine a world without credit cards. From a couple of cups of coffee to going on a vacation in the Bahamas, credit cards are all it takes to make your dreams a reality. But recent developments have caused the credit cards to be viewed as nothing but a tool for getting people deeper into the quicksand of financial ruin. So where are credit cards taking its consumers? And what can people do to minimize the negative effects of the current trends in the credit card market?

Standard Interest Rates Continue Rising

An astounding 80% of all credit cards issued nowadays have variable interest rates. This means credit card companies who issued this type of credit cards can raise the interest rates paid to them every time the Federal Reserve raises benchmark interest rates. Sadly, interest rates are rising as minimum payments for credit card accounts have also been rising; this is the result of a change in the way minimum required payments are computed, which is now designed to allow borrowers to pay a little of both the principal and the interest.

The hike in both interest rates and minimum payments will certainly put pressure on the financial capabilities of credit card users. What consumers can do, especially the ones with poor credit history, is to diligently look for other credit card offers that have lower interest rates. After all, countless credit card companies are flooding the market and competing for consumers' attention so there is bound to be an offer out there that undercuts the market.

Suspicious Low Rate Offers Will Continue To Pop Up

As more and more credit companies are fighting for their share of the market, more and more companies will offer low interest rates, which if taken at face value will be very attractive for consumers. However, as average interest rates dictated by the Federal Reserve continue to reach for the sky, it is impossible for credit card companies to provide low interest rates for its borrowers without subsequently closing shop. It is only logical that credit card companies will recover the cost of offering low rates in other avenues like requiring borrowers to make more purchases and more service fees or higher charges when transferring balances from other credit cards.

Consumers should always remember to read the credit card contract carefully to avoid being lured into the trap of suspicious low interest rates. Above all, borrowers should make it a point to never be late for payments when due dates arrive, as a single delay in payment can be viewed as a breach of contract and can be a cause for invalidating the low interest offer.

Fees Will Continue To Find The True North

Over a period of ten years, the average service charges for purchases made that go beyond the credit limit, overdue payments, and other violations on the credit card contract have gone up almost 100%. It seems credit card companies have realized that they can profit so much just on fees alone. Therefore it is never wrong to assume that credit card companies will continue to raise their penalty fees.

There is no other way for consumers to counteract this except by avoiding late payments and going beyond the credit limit. As a rule of thumb, consumers are advised to limit their credit card usage at half the credit limit to ensure that bills can be paid right on time.

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