Credit Card Promos

No Annual Fee. 0% APR on purchases for six to twelve months. No cash advance or balance transfer fees. These and other credit card promos sound good, however, before you trade in your old credit card and get a new one, find out how credit card promos work so you can make an informed decision on whether or not you want transfer your credit card balances.

Credit Card Promos

Ever opened the mail and received flyers from credit card companies offering low interest rates to switch to their credit card? Rather than throw away the credit card promos, sit down and think about this:

The higher your interest rate, the longer it takes to get out of debt!

National Debt Crisis Center is a non-profit credit counseling agency offering a variety of financial solutions for managing your credit card debt. For individuals with fair to good credit, getting out of debt can be as simple as lowering your credit card interest rates. Beware of offers promising low interest rates, which raise the rate after a short period of time (see Credit Card Promos Alert).

Contact us online or call National Debt Crisis Center at 1-800-334-6797 to find out how credit card promos can work for you!

How Do Credit Card Promos Work?

Basically, you agree to transfer a part of your existing credit card debt to another credit card that has a low introductory APR (annual percentage rate). By having 2 or more credit cards with partial balances, not only will you save on credit card interest payments, you'll also increase your credit score. Credit reporting companies like to see credit card usage, and prefer to see a balance between spending and available credit.

Credit Card Promos Alert

Before you jump to another credit card, make sure the promo offered is going to help you. Here are some basic questions to ask when switching credit card balances to a lower interest rate:

• How long does this “special” interest rate last?
• What is the credit card interest rate after the promo ends?
• Does this “special” interest rate apply to transfer of balances, new purchases or both?
• Are there any “hidden” fees associated with this new credit card?

Make sure you understand exactly what you are getting when you take advantage of credit card promos. Read all the fine print. Some of the “hidden” fees associated with credit card balance transfers are:

• Balance Transfer Fee – The new credit card charges a fee for transferring balances. These fees can be as high as 4% of the total balance transferred. Transfer $2,000 dollars and you could pay up to an $80 transfer fee.
• Initial Balance Transfers – Some credit cards allow you to transfer credit card balances for free once, at the time of setup. After that, the credit card company charges for balance transfers.
• Late Payments – Many of these credit cards put a clause in the contract that voids the “special” interest rate if you make any late credit card payments. If this is the case, make sure you pay your credit card bill on time each month.
• Switching Penalties – Now that you've switched, the new credit card company wants to make sure you'll stay. They may have a penalty clause if you switch balances again to another new card, and that could cost you money! For credit scoring purposes, it's best to remain with your new credit card for at least a year.

Warning – if you need to transfer from one card to another to stay current, you may be in danger of falling behind and should consider a debt management program. Contact us online or call National Debt Crisis Center at 1-800-334-6797 to learn more information on debt management programs.

Credit Card Temptation

Now that you've got 2 or more of your credit cards down to partial balances the temptation will be to buy, buy, buy.

Remember, the reason you transferred your credit card balances is because you wanted to lower your interest rate and get out of debt faster. Don't give in to credit card temptation and go shopping. You'll end up with a credit card bill that's even bigger than what you started with!