Should you accept that debt balance transfer offer?

You see them all the time – offers that arrive in the mail from a credit card company that offer you a zero percent interest if you transfer your current credit card debt to a new card. The offer is a tempting one and causes you to think about the freedom it could offer you. However, is this offer really as good as it seems?

Forbes states that the success of taking advantage of the balance transfer depends on your habits and on the terms of the transfer. If you are planning within the next six months to buy a new car or home, then you may want to shred those balance transfer offers. A balance transfer can affect your credit score by as much as 10 points because during the application process, the credit card company will run a check on your credit. Additionally, some transfer offers tack on a transfer fee that can grow pretty large, depending on the amount you want to move over.

The zero interest can also be misleading as it is contingent on you making your payments in a timely manner. If you are late on payments or fall behind, your credit score can suffer, you can find yourself hit with a high interest rate and you will probably have to pay fees to the company. Large amounts of debt may not be a good idea to consolidate either as credit card companies often issue a limit on how much you can transfer to the new card. This could leave you with more monthly payments to meet and greater financial challenges.

On the other hand, if you are a frugal person and you estimate that you can pay off the balance before the zero interest limit ends, then a balance transfer can actually save you money and help you gain better control over your financial situation. 

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