The Wong Ohana

• Something you want to BEWARE of and be AWARE of are the Promotional offers for Balance Transfers.

They can look very enticing, but remember the cardinal rule - Read ALL the SMALL PRINT!! I can’t stress enough how VERY important this is. You may think all offers are the same, but it couldn’t be farther than the truth!

The first thing to look for is interest rate/time period ratio. 6% for 1 year can be a better deal than 4% for 3 months. So make sure that you look at the ENTIRE offer and see what is best suited for your circumstances.

Also don’t forget to take notice to see if there is a “transfer fee”. This is where they get you! If you have a 4% offer, it can look very good on the surface, but if its only for 3 months, and there is a 3% transfer fee - you’re not really paying 4% are you???? This has just become a 7% offer for those first 3 months in addition to whatever their normal rate will become for the next 9 months - and don’t forget to add in the additional 3% to that rate too! That 3% applies to the entire balance you transfer over before you start to pay any of it down, so it can add up. Its always best to wait for an offer that has “no balance transfer fee”, or you can call them up and ask if there are any conditions under which they will wave the transfer fee, and/or lower the rate. Also no guarantees there, but it has been known to happen.

Filed under: Credit Card DOs and DON'Ts, Personal Finances on January 14th, 2008