Loose those credit card debts!

Today it’s possible to transfer the higher-interest credit card balances onto a credit card with a lower interest rate. It is possible with balance transfer feature available on most credit card offered in the market.

Opening a new credit card may seem like the last smart thing to do when faced with mounting credit card debt. In one case, however, this may make sense and wind up saving you a lot of money as well. This special exception is a credit card balance transfer.

In an effort to lure consumers to their credit card, many companies offer free balance transfers from your old credit card. Once the money is safely owed to the new company, they will often provide a grace period where they charge far less on the transferred balance. Finding two, one, or even zero percent interest is possible. Often, this introductory rate lasts for around six months to a year after the balance transfer takes place.

For a savvy consumer, this can be an excellent method of reducing credit card debt. It leaves the person free to pay down the balance on a credit card without incurring interest charges. Using this strategy, a person could potentially open a new account that offers a balance transfer when the old one expires. Then transfer all of the balance to the new card to begin a new grace period of low or non-existent finance charges. If you plan to do a balance transfer, be sure to close your old account immediately; having more than two credit card accounts open may damage credit scores.

Making a balance transfer work for you is an excellent practice, but diligence is required. Sometimes there is fine print attached with hidden charges. Some banks may charge a transfer fee that can be a percentage of the balance transferred. Be sure that there is a cap on the amount, like fifty or seventy-five dollars, or else a balance transfer in the thousands may end up costing a couple hundred dollars. Also, be sure the bank doesn't charge a high annual fee, or joining fee. The credit card companies are already getting your business, so don't let them take the upper hand in a balance transfer.

Good Debt Vs Bad Debt

I did a presentation during a public forum on "Good Debt Vs Bad Debt" two weeks ago. The objective of the forum is to help the public understand the debts better.

Millions of people struggle financially because the the power of debt leverage is used against them. Because of the consequences of abuse, many people fear this form of leverage.

There are three groups people in this world: The Poor, The Middle Class and The Wealthy.

Poor people would be those who are loaded down with bad debts, with no means to ever get out of their indebted situation.

Middle Class folks are those who denys any goodness in getting into debt, pays everything with cash and leading a life just over broke.

The Wealthy make use of debt as an instrument to create more wealth for themselves. So long they can afford to spend, the will pay on credit. Earn points to exchange for gifts, keeping the cash for emergency.

So if i were you, i would take up the renovation loan and keep my cash in some liquid investment (e.g. short-term fixed deposit) to earn interest and for emergencies.

Good luck!

Gorix, Self-taught Financial Guru