Make sure you are aware of these 3 factors, prior to applying for a balance transfer credit card offer.administer for a equilibrise designate assign bill with warn - 3 filthy assign bill tricks

By doing these few things, you can save hundreds each year on finance charges by benefiting from a credit card balance transfer.

Payment hierarchy is a dirty little secret the credit card companies take advantage of, and most people have no idea what it is until it is negatively impacting them; and at that point it may be too late.

1. Balance Transfer Fee

Credit card default rates can change a promotional balance transfer rate from a huge money saver to giant blackhole of finance charges instantly. To ensure that you don’t go into a default status on any of your credit cards, make sure to do the following:

2. Payment Hierarchy

In summary, make sure to spend some time finding the right balance of a low interest rate with a low fee structure, set up automatic payments to avoid a late payment, and once you transfer a balance don’t make any more purchases on the card.

Be aware of credit cards that do not have a maximum cap for the balance transfer fee, though if you stick with the big guys like Chase, Discover, American Express or Capital One you won’t need to worry about it, they all tend to have fee caps.

To avoid falling into the payment hierarchy trap, simply don’t make any purchases on cards that are used for a balance transfer… don’t even bother activating these cards.administer for a equilibrise designate assign bill with warn - 3 filthy assign bill tricks

The concept goes something like this:

A credit card company offers a 0% balance transfer for 12 months, while the standard purchase APR of the card is a 9.99%. That may not seem like a bad rate at all for purchases, but if you make a purchase on a credit card that has an existing balance segment at a lower promotional rate, interest will end up accruing on the segment of the balance at the higher rate until the entire low rate balance is paid off. The banks allocate your payments that you make to pay off any lower rate balances before paying off higher rate balances. Basically, if you accidentally purchase a $40 tank of gas on a card with a 9.99% rate on purchases, and already have a balance on your account at a lower rate, you may end up paying hundreds of dollars for that tank of gas.

The most common balance transfer fee for credit cards is 3% of the total transferred amount with a maximum “balance transfer fee cap” of anywhere from $50 to $150. If you are transferring a decent size balance, and plan on taking more than a couple months to pay it off, the fee will be well worth it.

• Always pay at least the minimum amount due before the due date
• Never exceed the credit limit. In fact, play it safe and leave at least a few hundred for a cushion
• Make sure to stay current on your other credit card obligations. Believe it or not, banks can default your account if they see you have a delinquent balance with another creditor.

3. Default Rates

In the current state of the credit card market, it is quite difficult to find any balance transfer offer with no transfer fee fee. If you do some digging online, you may be able to find one with any luck.

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