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Chapter 9. FINE PRINT > Transferring Balances

Transferring Balances

Everyone is tempted at one time or another to transfer his or her balance on a high interest credit card to another card with a significantly lower interest rate. Sometimes you do not even have to open the envelope from the credit card company to know what a great deal they are offering. Right there on the outside of the envelope, enticing you to open it is a proclamation that you can get this new credit card at interest rates so low it makes your wallet spin. Sometimes they even offer you a zero percent interest for a period of time. Those credit card companies sure must love us to make us such tremendous offers. However, the fine print is not quite as appealing. First of all, the so-called teaser rate may last only a few months, and if you make a mistake and are late with a payment, all bets are off and they jack up your interest rate to a figure greater than the voting age. And even though the letter says you are pre-approved for this great teaser rate of zero percent, again the fine print says that the actual rate that they will offer you depends on their analysis of your completed application. As Gomer Pyle used to say, “Surprise, surprise.” Many people who receive those envelopes with the teaser rates on the outside do not qualify for that rate. Instead, they are given a higher interest rate.

What does it cost you to transfer your balance from the old credit card to the new card? Again, you have to read the fine print to learn whether they have balance transfers fees, which are often between three and five percent of the amount you are transferring. Sometimes they have a cap and sometimes they do not.


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