Why Transfering Card Balances Can Save You Hundreds On Interest Charges Annually

Jugging numerous credit cards can be difficult. If there are several small credit cards, or a large balance that can be transferred to another card it may save a great deal of money. For instance, some new credit cards will offer a 0 percent interest rate just to transfer a balance to their card. If the balance transferred to the new card is around $8 thousand dollars and the interest rate is 18 percent, this has the potential to save a credit holder over $1 thousand dollars a year in interest alone. Some view this is a big hassle, but it could be well worth the effort just to make a simple transfer. When transferring to these companies with introductory offers, it is important to remember that the internet rate will not always be 0 percent. In fact, the interest rate could be more than the initial 18 percent that was being paid, so proceed with caution and read all the fine print.

There are many credit card companies to choose from. Some will charge an annual fee while others will not. If a person has good credit, they should be able to find a company that will not charge them anything. Those with poor credit often choose second rate lenders who can charge as much as a few hundred dollars in annual fees. The average annual fee is $50. On top of annual fees, some credit card companies will charge a balance transfer fee, but this fee should never be above $100 .The average balance transfer is three percent.

When the cards offer an introductory interest rate, they will expect the payments to be made on time. Reading the fine print it is often discovered that if a payment is late, the generous interest rate will revert to the original card rate and or a fine. While everybody should try to pay more than the minimum payment, at least paying the minimum will avoid additional charges and penalties

Another reason to transfer a balance is for perks. Those who fly frequently or participate in gas saving can also add up big. With the price of gas and airline flights those perks can spell big savings and be worth the balance transfer fee. Some cards will give a percentage back of the amount of money spent with them, which can add up to gift cards and other nice benefits. Having free gift cards and other benefits can add up big, especially during the holiday season.

The only thing to be weary of when transferring a balance is the debt to ratio. Having too many accounts open and or closing an account can impact the credit score. The FICO is measured on how close to being maxed a credit card is. If a person transfers all their balances to one card it may put that card near the limit. Having even one credit card that is maxed out can means a drop in the credit score. Balance transfers are great options but proceed with caution.

This article was provided as a resource from the lending experts at short term loans, a leading consumer finance website dedicated to helping consumers make sound financial decisions.

Why Auto Title Lending is Available to Borrowers with Bad Credit Scores

These days almost anyone can suddenly be met with financial hardships. Unexpected medical bills, car trouble, an unforeseen unemployment and plenty more factors have led millions of Americans to suddenly find themselves in need of cash with nowhere to turn. And as things get worse so does your credit score, which means opportunities to borrow money get fewer and further between. It’s a vicious cycle that’s hard to break out of and one of the reasons certain less-traditional methods of lending money have become so popular. One of these methods is auto title lending. It is a form of loan, usually with high interest, that uses an existing automotive title as the collateral with which someone can borrow against. That way anyone who owns a car and has the valid title to it in their name can immediately borrow a sum of cash regardless of whether they have bad credit history. To understand how this is possible and why auto title lending is available to borrowers with bad credit scores we must first understand how a traditional loan works.

Normally an American who needs to borrow money in a pinch will turn to traditional bank loans. These require a credit application at which time the bank will assess the credit score, borrowing history, amount desired for the loan and risk of getting it paid back in timely installments. This helps make a decision about whether to finance the loan, offer a lesser amount or a worse interest rate, or turn down the applicant outright. For those with bad credit a traditional bank loan is simply not an option. There is to much risk in a down economy and no lenders will finance loans to someone with a spotty financial history.

However auto title lending is available to borrowers with bad credit because most of the time an auto title loan does not even require a credit check. That’s because the auto title itself is used as the collateral, as in the title is what the applicant is borrowing against. In a bank there is no collateral. The loan is given based on the good faith of the borrower’s past finances. But when an auto title is used there does not have to be good faith or a good credit history, because if the borrower fails to repay as agreed the auto title is taken instead as a backup. While this enables even those with very poor credit scores to get loans in a pinch it also puts them in a bind. If they fail to pay and default on the loan it will be reported to a credit bureau and the score can be affected. But the lender will also legally seize the auto title and have the car repossessed. Combined with the fact that auto title loans typically come with much higher interest rates and less of a maximum amount you can borrow it’s clear they are far less desirable than a standard bank loan. But because of the reasons listed that allow them to be available to those with bad credit they are often the easier, and sometimes only, choice