The Credit Card Offer Game

Living on credit is a way of life in the United States. The average American household holds six credit cards and the credit card companies are in fierce competition to win customers. Every day, mailboxes are filled with more offers of credit and it's hard to know which offer is really the right choice, if any are at all. These offers often tempt with a "grabber" such as no interest or incredibly low rates but if you are not careful that great offer can end up costing you thousands.

On the surface, transferring a high interest credit card balance to a 0% account will definitely save you money. But, there are things to be wary of; watch out for fees, penalties or other hidden costs that could end up costing you more than you saved by transferring the balance in the first place. Here is a list of questions to ask:

• Is there a fee for transferring the balance? Frequently, credit card companies charge a small percentage, 2-3% of the balance to transfer a balance. A balance of $9500.00 would cost $285.00 to transfer at 3%.
  
  
• Is the low percentage an "introductory rate"? If it is, how long does the introductory rate last and what is the percentage after the introductory rate? If you wish to transfer a large balance, will you be able to pay it off in that introductory period? If you can't, is the interest rate after the introductory lower or equal to your current interest rate?
  
  
• Is there a limit on the balance amount that you can transfer? If you can't transfer the entire balance, remember that this will leave you with two accounts open. More accounts equal more danger of running up additional credit card debt.

Before committing to transferring a balance be sure to study your situation to ensure that you won't be moving from bad to worse. Everyone dislikes reading the fine print, but where it involves you hard earned money, you may be glad you did. When an offer seems too be good to be true, you can't afford not to learn all you can.