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An option to pay off your debts (2014-05-12)
Are you unable to pay off the escalating dues of the credit card? Are you bearing the unexpected and unwanted burden of steep interest rates? You are in no doubt to having received the calls to pay back in equated monthly installments. If you are not comfortable with the installments, companies issuing the credit cards give another alternative, that is, of transfer of balance. Those who exist under a huge mountain of debt due to their credit card rapidly comprehend that their misery has two elements. Firstly, the principal, that was charged to their credit card originally. Second, there are the obligatory financing costs every month on the balance.
These two elements are better understood by the following example. With every statement cycle, the daily balance on an average is multiplied by one-twelfth of annual percentage rate. Consequently, if you owe $20,000 on the credit card with an APR of 12%, you are bound to incur $200 in interest every month. Owing to the influence of interest that compounds, the charges to be paid every month sum up to your balance, therefore leading to a higher interest being accumulated with every passing month. To sort this out, the process of credit card balance transfer is a boon. If you got a balance on several credit cards or you are paying off the elevated interest, you may be lured by your necessity to acquire a fresh credit card that proposes a balance transfer.
There are few things that you need to consider prior to conducting a credit card balance transfer. How much balance do you usually carry, and what are the chances of carrying a balance. It might be always, never at all or maybe a couple of times. What is spending pattern you follow? is it over or below, say, $5000 a month? What type of card you prefer? Low interest, balance transfer, cash back or student credit cards, anything can be chosen as per your preference. Many persons shift their balances of credit card to a fresh card, but they are not conscious of additional balances that are liable to be transferred. If one has store credit, that can be transferred too. One can also transfer loans and gas cards. However, one might only shift the balances on the fresh card depending on the credit limit allotted, so one might be unable to club more than the limit assigned. Annual percentage rates options are also to be considered while opting for a credit card. Cards that offer low APR for an indefinite period or until the end of time are certainly better than those which offer 0 APR but last only for a limited period of time.
This phenomena of transfer has also an effect on the personal front. One can learn to manage the financial future and obligations much more effectively. They understand that the accessibility of this facility must not be the sole decisive factor for purchasing stuffs and an individual should endeavor and remain within their means or budget.
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