If you carry a balance on your credit card/s, you might want to consider getting a 0% balance transfer credit card. In this section, you will find the Most Commonly Asked Questions And The Answers about balance transfer credit cards.

Q: How do I do a balance transfer?

A: In your application for the new card, it will usually include a section asking "do you want to transfer debts from other cards?". If you do, simply put in the details of the other cards in this section, and if your application is successful, it will pay them off. Don't worry if you don't do it during the initial application. Most credit card companies allow you to transfer your balance within a set period of getting the card (usually 30 – 90 days). Just contact them and send them the details of your other credit cards.

Q: Will I pay less each month since I now have a lower interest rate?

A: No. It depends on the card's 'minimum monthly repayment' even though you decide how much you wish to repay each month. So in some circumstances, if the balance transfer card you have has a higher minimum even though you may have shifted your debt to the 0% or low interest rate card, you will need to pay more each month. If you find the minimum repayment sum to be unaffordable, you may wish to switch to another balance transfer card.

Q: How much should I pay off each month?

A: 0% debt is still debt! Therefore you should aim to pay off as much as you can each month. The more you repay, the faster the debt can be paid off completely. It is absolutely essential to pay more than the minimum required each month if you want to get out of debt in a timely and cost-effective way. For more tips on how to do it, read The Dangers Of Minimum Repayments article.

Q: Why is it important to lower the interest even if I may end up paying more each month?

A: The lower the interest rate, the more of your repayment goes towards clearing what you owe, and less going to interest. You will be able to pay off your debt quicker, and also be paying less on the whole to become debt-free.

Q: What should I do if the credit limit I get isn't high enough?

A: Transfer the maximum amount that the balance transfer card allows, and then perhaps consider applying for another balance transfer card so that you can transfer the remaining debt there. Since the card is recorded on your credit profile, you might as well use it instead of leaving it unused.

Q: Can I balance transfer as many times as I want?

A: Yes. You can balance transfer from card, to card, to card as many times as you want. The only catch is that your credit score must be good enough to be accepted for new credit cards.

Q: When is it time for me to apply for a new balance transfer card?

A: Give yourself ample time to apply for a new card, say six weeks before your current 0% period expires. Six to eight weeks should be sufficient time for you to apply, find out if you've been accepted for the card, and transfer the debt while you are still within the 0% period. Beware! If you fail to pay off a card in the last 0% month, your lender will charge you with a lot of interest - and that's exactly what they want to do.

Q: If I shift my balance from card to card to card, does it affect my credit score?

A: The key is to spread out your credit card applications over a period of time. Compare the rates on several balance transfer cards, and select one - and only one - to apply for. Multiple applications may show up on your credit file, and lenders do not like to see that as they assume you might be going on on a spending spree. Any high outstanding debt, even at 0% rate, will affect your ability to get credit on more favorable terms. But if you do not miss your payments and have a decent income, it should all be fine. (read What Is A FICO Score, And Why Should I Know About It? article).

Q: My balance transfer card offers 0% interest for spending. Should I spend on it?

A: Read the terms carefully. If your card has a 0% offer for purchases and balance transfers that lasts exactly the same period of time, then it's ok to use it for spending. But you are better off not spending on it if the 0% offer period is different for purchases and for balance transfers as your spending debt may end up being entrapped if you can't pay it off, which also depends on the repayment structure.

Q: Do I need to pay interest on the balance transfer fee?

A: This depends on the specific card, so it varies. Sometimes an interest is charged on the fee, and could be arranged in such a way that your repayment for the first month pays all of it off, so the interest is negligible.

Q: Which cards give the best credit limits?

A: That's difficult to say as that depends on your individual credit score, and how the lender assesses you. (read How To Improve Your FICO Score article).

Q: I've good credit score, so why did I get rejected for the card?

A: The credit card companies select individuals not solely based on risk, but also select customers who could be more profitable for them. That said, you should still check your credit file for errors, but the real reasons can be elusive. (Read Do Lenders Only Look At Your Credit Score? article) Take advantage of the fact that getting turned down means you can request another free copy of your credit report, in addition to the one free report you are entitled to annually from the national credit bureaus.