Most of the credit card companies make the bulk of their money from finance charges. A finance fee comprises of the extra charges that are added on to your existing balance if it isn’t paid off in full within the grace period, or before the next billing cycle.

The charges can vary depending on your balance and the APR of your credit card. Although they may seem small if you’ve got low balance of around a few hundred dollars, they can certainly add up and form a big amount if the unpaid balance is huge.

It is also possible that you won’t be doing much more than paying the interest on your credit card, if you only make the minimum payment each month, while leaving the principal balance untouched.

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There are a few important things that should be kept in mind when choosing a balance transfer credit card. The most important aspects are APR, associated fees, and the time period for which the low-APR rate is fixed or offered.

Assess Your Financial Position

But before considering the benefits of a balance transfer credit card, you must assess your financial situation and your credit card debt. Everything depends on whether you have a large amount of debt, or a manageable amount that can be paid off in a short period.

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