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Is that credit card debt transfer offer a good idea?

Using credit cards has its positives and negatives. In a previous blog post, you learned about different ways in which you can control your credit card balances to avoid financial problems. One option, which you may receive often, is an offer from credit card companies that features 0 percent interest on a balance transfer. However, is this offer a benefit or the source of further issues?

Transferring the balance from one card to another can work against you if you plan to keep the other card open. Forbes points out that you may be tempted to keep engaging in the same spending habits. If you do so, you will only succeed in increasing your credit card debt. However, if the debt was the result of an unexpected emergency or a one-time purchase, than taking advantage of a no percent deal for so many months will save you money.

Transfers often come with strict requirements, and failing to adhere to these requirements can quickly put you into a financial tailspin. The repercussions can impact your credit rating and leave you facing several fees for late payments as well as the challenge of how to rebuild your credit.

The amount of points on your credit score can affect what type of interest rate you receive on a large purchase like a car or a real estate property. Any credit inquiry during the six months prior to your applying for that purchase can remove around 10 points. If you decide that you want to take advantage of a transfer offer, that company will make an inquiry into your current credit report.

If you read the details of that transfer offer, you may also discover that the lender will charge you a fee for the transaction. This fee is generally a small percentage of your balance but it can quickly add up if the balance is quite large. This may erase any benefit of the transfer so it is important that you consider all possible scenarios before deciding to use this option.

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