Credit Card Terms

Most of the credit cards provide the balance transfer facility. Balance transfer means transferring the outstanding or balance amount that is payable on one credit card to another credit card with a low interest rate. Before you proceed for a new credit card, solely for balance transfer facility; keep the following things in mind.

Lower introductory rates on credit cards may last anywhere between 6-12 months. Also, Most of the major credit card companies offer zero percent rates on balance transfers. However, one delayed payment is the invitation that your credit card company needs to surge the interest rates.

Nowadays, points, mileage credits, and cash-back rebates can be earned on just about anything – from round-trip airline tickets to merchandise discounts. Even charging gift cards to give as presents can add up the reward points. Consumer Reports expects gift cards to be the second most popular gift item during 2006 -- preferred by 60% of shoppers – behind clothing at 73%. While giving a gift card once appeared to be a last minute sign of desperation among procrastinators, it’s now the ideal gift for any occasion.

- Few low interest rate cards impose a transaction fee to avail the balance transfer facility. Get alert & go in the opposite direction (though credit card not being offered) when you hear about the transaction fee.

- You need to ensure that your old credit card company has sent a billing statement, which states that you have cleared your outstanding balance, to you. Also, make sure these values tallies with the billing statement issued by your new credit company, which confirms all the balance has been transferred, indeed. Then only close your old credit line.

While you avail of the balance transfer facility, which may take anywhere between 2-4 weeks, make minimum payments on your old card. Never commit mistake of not closing the credit line on your old card. You might get succumbed to temptation of charging credit to your old card.

Make sure that you check out the credit card account for any other charges in addition to the interest rate. Some cards charge annual or even monthly fees just for having the account. I would personally steer well clear of those kinds of accounts unless I can see a clear benefit in other areas.

- Ensure you are applicable to bottom rate being offered. Offers may boast of rock bottom rates, which suddenly increase by a large margin after an introductory period. You might have qualified for a 5 percent initial rate, which increases to 20% after 6 months. Else one may qualify for a 4 percent initial rate that will increase to 15 percent after 8 months. Make a hard bargain for the best of the best rate.

Other Balance transfer card features include:

- APR rate ranging between 9 - 11 %

- Typically other three interest rates offered (Introductory, Monthly and Annually). The Introductory rate is usually 0%; the monthly rate varies between 0.0 - 1.5 % percent and the annual rate vary between 9-11%.

- Minimum and maximum credit limit

- Insurance cover against online fraud while purchasing on the Internet

- Card replacement in case of loss

- Customer service support 24/7/365.

Although there are a host of credit card related features on offer, the best protection against the whirlpool of credit card debt is to reform your spending habits. Learn to distinguish between needs and wants before your next purchase.

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