Just because credit card balance transfer offers are so convenient for getting out of the grip of high-interest credit cards, people should first look into some crucial points before availing of these offers.
Secured credit card balance transfer offers may not update your credit record
If you are currently drowning deep in credit card debt, you may have been advised to transfer your balance to a secured credit card. That is, in fact, one of the best options for you to take. However, you have to be sure that the company submits transaction records regularly to credit bureaus. Not all of them do, and some do it less frequently than others. Some will only submit to one bureau while others give their reports to all the main bureaus. There are even those who will charge you those submissions. On the whole it is best to avail of credit card balance transfer offers that automatically and periodically submit credit reports. Verify all these things from the company issuing credit card balance transfer offers before you sign any contract.
In the US there are currently three principal credit bureaus maintaining credit transactions. They are Trans Union Corporation, Experian and Equifax. The issuer of the credit card balance transfer offers should report to one or more of these three for you to consider availing of their card. You might also want to know the contact numbers, official websites and email addresses of the credit bureaus in your country. You can then double check your reports. It is rarely that mistakes have been found in them.
Secured credit card balance transfer offers carry with them some fees
There are three things you need to pay for before you can get and use your secured credit card. First, there is an application fee. Second, you will have to make a security deposit with the bank if your issuer is a bank. Otherwise, the issuer will specify which bank you have to deposit the money in. Thirdly, you will need to pay a fee to enable your secured credit card for transactions. Again, it is up to you to determine whether the fees the issuer is charging are within legal limits. In the US you can consult the Federal Trade Commission to ask about the legal amounts for these various fees.
With some banks, your security deposit will earn interest. You should ask the issuer of the credit card balance transfer offers if your security deposit will earn interest while under their control otherwise you may want to look for some other options.
Check out the credit limit, the annual fees and regular interest rates of secured credit card balance transfer offers
If you are availing of a secured credit card to rebuild poor credit, you will be getting higher interest rates as well as higher penalty fees. Annual fees are also required. However, you should always try to haggle for the lowest values for all those fees. Regarding your credit limit, it will either be a portion of your deposit or the whole of it. This all depends on your credit record.
Keep all those things in mind before availing of secured credit card balance transfer offers.