One of the options for debt repayment is 0 balance transfer credit cards. However, not all debts can be paid off during the short introductory period that these cards carry. The second choice is a long term and low interest balance transfer card, but only if you meet the specific approval criteria.
If you have a relatively small debt then 0 balance transfer credit cards are a good choice. They usually offer a period of three to six months where the balance that you have moved from an old credit card or cards earns no interest. This should give you a good amount of time to pay off your debt and save you all of the extra money you would have paid in interest charges. But, in some cases people find themselves in a financial situation where three to six months is not nearly enough time to even make a dent in their credit card debt, much less pay it off completely. This is the reason behind long term balance transfers.
As opposed to 0 balance transfer credit cards a long term balance transfer gives you twelve months or even longer to pay down your debt at a low, but not free, interest rate. Even though you are not going to save as much money by doing this type of balance transfer you will still save some, often a significant amount, of cash. For example, if you have a credit card that has a 15% interest rate and you are able to transfer it over to a new card that has only a 2.9% interest rate for the balance transfer you have saved nearly 12% just in interest fees. Add to that the ability to spend the extra cash making larger payments which allow you to pay off your debt earlier and the savings grows even more.
It is easier to qualify for the 0 balance transfer credit cards then for some of the longer term cards. Twelve month cards are easier to get then those lifetime balance transfer cards. The lifetime balance transfer cards give you all of the time you need to pay off your debt, but their requirements are harder to meet.
Getting long term instead of 0 balance transfer credit cards:
- Australian citizens who have high salaries.
- Excellent debt repayment history.
- Large transfer balance.
When you have a large balance to transfer over it sends a message to the credit card company that you will continue to spend on your plastic. They want customers who they are confident they can make money from, and big spenders usually qualify.
If you can get one and your debt is too large for 0 balance transfer credit cards these longer term cards can be a good choice. But, as always the best thing to do is to get one and curb your spending significantly until you pay off that balance. When you are paying interest on a credit card each day that passes is costing you money.
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