Before looking to transact a balance transfer on the new credit card, be aware that numerous unpleasant consequences can occur to your money should a miscommunication occur between you and also the credit card agent who is assisting the transaction. This article discusses six balance transfer disasters to prevent. Balance Transfers On RiseIt's no information that, in these tough economic occasions, credit card customers are looking with regard to low promotional rates on balance exchanges. What most people do not understand, however, is that problems with balance transfers are also increasing, primarily due to miscommunication between charge card agents and the customers they function. Problems include:
Balance Transfers Which Fail
Surprise Interest Rates
Surprise Costs
Surprise Time Frames
Unexpected Payment Percentage Provisions
Differing APR's In Account Segments Customers about the receiving end of these surprises tend to be, understandably, upset because each surprise expenses them time, money and frustration. Adding to the frustration is the truth that, each time a customer calls his charge card company, he talks to a various agent. Let's look at each instance in more detail to comprehend the impact each has on credit cards customer. Balance Transfers That Fail - An ExampleA customer calls into shift a high interest loan from charge card account A to low interest charge card account B. At the end of his telephone call, he believes that the transfer may be approved and account A will be repaid. Two or three weeks later this customer discovers that charge card account A never received any money from account B. When he calls customer support for account B, he discovers how the deal did not go through as well as, according to this agent, is never going to undergo. Worst Case Scenario: Anticipating th
at loan A will be paid in full the customer didn't make his payment. He is hit having a late payment fee of $39, his account is "re-priced" due to being late, and his interest price on loan A is doubled. This late payment will affect his credit score which is unlikely that he can get a balance transfer elsewhere to get out from under the doubled rate of interest. Surprise Interest RatesA customer calls in to make the most of a zero percent promotional rate on the balance transfer. He transfers a 9% loan from charge card account A to what he understands would have been a one-year 0% loan on credit greeting card account B. He expects to pay no interest for any year. Yet, when he receives his first declaration he discovers that his "low interest" transferred loan comes with an 18% annual interest rate. Worst Situation Scenario: Fuming, the customer takes his frustration on the next credit card agent who then doesn't have desire "go out on a limb" in looking to get an interest c
redit for him. The actual agent checks the record, sees how the terms to which the customer agreed stipulated an 18% rate of interest and tells the customer that, if he doesn't such as the rate, he can pay off their account. Surprise FeesA customer responds to some promotional offer and calls in in order to transfer eight thousand dollars from charge card account A to his new charge card account B. He understands that he will receive a low promotional rate for the first 6 months, plus he thinks the agent agreed that he won't be charged a transfer fee (normally 1% to 3% from the balance being transferred). When he receives his statement he's stunned to see a charge with regard to $240. 00 (3% of $8, 000. 00) that has been billed to his account like a fee for transacting the transfer. Worse Situation Scenario: Once funds are transferred, the terms under that the balance transfer occurred cannot be transformed. Therefore, the 3% upfront transfer charge will stand. Should the ne
xt charge card agent be persuaded to believe the client was misled into believing that there will be no upfront fee, that agent could get authorization to credit the customer's account by having an amount equal to the fee. Nevertheless, if he believes that the client knew what he was agreeing in order to, the fee will stand. Surprise Period FramesA customer transfers a balance associated with $5, 000. 00 from a charge card with a 12% interest rate to some new credit card account. He understood how the new account would have a zero percent rate of interest for a year. While everything is okay for six months, in month seven he discusses his credit card statement and sees that his rate of interest is now 18%. Once funds tend to be transferred, the terms under which the total amount transfer occurred cannot be changed. Consequently, the 18% interest rate is the eye rate on his account. Should the credit card agent end up being persuaded to believe a technical glitch accounts for
the change, or that the customer was misled into believing he entered into an agreement based upon less interest rate for a full a year, the agent may get authorization to credit the customer's account by having an amount equal to the interest billed in month seven. However, since anticipated or estimated future interest won't ever be credited to an account, the customer will need to call back in months eight, 9, ten, eleven and twelve if he wants credit for that interest added in those months. Each time he will need to re-explain his situation and request that his account get a credit for the interest added which month. Since the customer will talk to another agent each time he calls within, he may have different results through month-to-month. Or, he may be told he will not receive any more credit. Worst Case Scenario: If the very first agent, who speaks with the client when he first calls in 30 days seven, sees any kind of on-screen documentation leading him to believe t
hat the customer knew he was agreeing to an 18% rate of interest beginning in month seven, the rate will stand and you will see no adjustments at all. Unexpected Payment AllocationsA customer takes benefit of a zero percent offer on the balance transfer and transacts a stability transfer for $10, 000. 00. He believes he's been told that he can set aside payments specifically to his purchase stability, so he goes ahead and uses the brand new card for purchases as well. Even though his purchase rate is 18%, his intention is to repay his new purchases each month therefore he pays no interest. When he takes time to examine his first (or 2nd or third) statement, he realizes that his payments are going toward the 0% interest balance transfer part of his account while his higher interest purchase balance remains unreduced and it is collecting interest at 18%. Worse Situation: Unfortunately, the worst scenario is the only real scenario. No money he pays is going to be applied to his
high-interest purchase stability until his balance transfer is repaid entirely. Differing APR's In Account SegmentsA client, who wants to buy a brand new TV, calls in response to credit cards offer he has received which promotes a a zero percent promotional price on purchases. He does not ask if the 0% interest rate also applies to balance transfers or payday loans. Instead, he assumes that it will. He decides to transfer $3, 000. 00 from the card on which a 2. 4% promotional rate is placed to expire. Then, in the forty-five-day interval before he or she receives his first statement for his new charge card, he charges a $2, 500. 00 giant screen TV and gets a $300. 00 cash loan at an ATM. Worse Case Situation: The 0% promotional rate only pertains to purchases. The rate for cash advances is 21% and also the rate for balance transfers is 18%. As a result of special provision, all payments he makes is going to be allocated first to his $2, 500. 00 purchases balance until it's
paid off. All payments thereafter is going to be applied to his balance transfer mortgage of $3, 000. 00 (plus ongoing interest at 18%) until it's paid off. Meanwhile, interest will accumulate on $300. 00 at 21% until anything else on the account is paid away. CAUSESWhile some of these problems could be caused by technological glitches, I am told that the majority occur due to "communication" errors. For a detailed knowledge of the factors which contribute to individuals errors, I refer the reader in order to my article "Could You Repeat Which? " - Communication Challenges For Charge card Agents. SUMMARYIn our current economic climate more charge card customers are seeking out low-interest promotional balance transfers in an effort to help them manage their debt. However, there's always the possibility of miscommunication or mistake regarding the terms agreed upon. When conditions are misunderstood, then getting a new card and transacting a balance transfer could be pointles
s at best, and a monetary disaster at worst. Terms cannot be changed once funds happen to be transferred, so it is vital that credit cardholders know very well what can go wrong in transacting the balance transfer. Since it is the credit cardholder who'll suffer should a balance transfer "go poor, " knowing what can go wrong isn't enough. He must adopt a pro-active strategy to ensure his transaction has the greatest chance of "going right. " To that end I send readers to my article Credit Card Balance Transfers - How to prevent Disaster. © 2009 Clyo Beck. The writer asserts her moral rights.
Clyo Beck may be the co-author of Money Saving Credit Greeting card Secrets, an indispensible and practical guide on to how to prevent credit card hassles and save money which will pay for itself many times more than. It is the best investment any charge card user can make. For more free of charge tips, or to preview the first four chapters of Money Saving Charge card Secrets without cost, visit http: //www. moneysavingcreditcardsecrets. com.
View this post on my blog: http://creditcard.valuegov.com/credit-card-balance-transfers-6-disasters-to-avoid/
Balance Transfers Which Fail
Surprise Interest Rates
Surprise Costs
Surprise Time Frames
Unexpected Payment Percentage Provisions
Differing APR's In Account Segments Customers about the receiving end of these surprises tend to be, understandably, upset because each surprise expenses them time, money and frustration. Adding to the frustration is the truth that, each time a customer calls his charge card company, he talks to a various agent. Let's look at each instance in more detail to comprehend the impact each has on credit cards customer. Balance Transfers That Fail - An ExampleA customer calls into shift a high interest loan from charge card account A to low interest charge card account B. At the end of his telephone call, he believes that the transfer may be approved and account A will be repaid. Two or three weeks later this customer discovers that charge card account A never received any money from account B. When he calls customer support for account B, he discovers how the deal did not go through as well as, according to this agent, is never going to undergo. Worst Case Scenario: Anticipating th
at loan A will be paid in full the customer didn't make his payment. He is hit having a late payment fee of $39, his account is "re-priced" due to being late, and his interest price on loan A is doubled. This late payment will affect his credit score which is unlikely that he can get a balance transfer elsewhere to get out from under the doubled rate of interest. Surprise Interest RatesA customer calls in to make the most of a zero percent promotional rate on the balance transfer. He transfers a 9% loan from charge card account A to what he understands would have been a one-year 0% loan on credit greeting card account B. He expects to pay no interest for any year. Yet, when he receives his first declaration he discovers that his "low interest" transferred loan comes with an 18% annual interest rate. Worst Situation Scenario: Fuming, the customer takes his frustration on the next credit card agent who then doesn't have desire "go out on a limb" in looking to get an interest c
redit for him. The actual agent checks the record, sees how the terms to which the customer agreed stipulated an 18% rate of interest and tells the customer that, if he doesn't such as the rate, he can pay off their account. Surprise FeesA customer responds to some promotional offer and calls in in order to transfer eight thousand dollars from charge card account A to his new charge card account B. He understands that he will receive a low promotional rate for the first 6 months, plus he thinks the agent agreed that he won't be charged a transfer fee (normally 1% to 3% from the balance being transferred). When he receives his statement he's stunned to see a charge with regard to $240. 00 (3% of $8, 000. 00) that has been billed to his account like a fee for transacting the transfer. Worse Situation Scenario: Once funds are transferred, the terms under that the balance transfer occurred cannot be transformed. Therefore, the 3% upfront transfer charge will stand. Should the ne
xt charge card agent be persuaded to believe the client was misled into believing that there will be no upfront fee, that agent could get authorization to credit the customer's account by having an amount equal to the fee. Nevertheless, if he believes that the client knew what he was agreeing in order to, the fee will stand. Surprise Period FramesA customer transfers a balance associated with $5, 000. 00 from a charge card with a 12% interest rate to some new credit card account. He understood how the new account would have a zero percent rate of interest for a year. While everything is okay for six months, in month seven he discusses his credit card statement and sees that his rate of interest is now 18%. Once funds tend to be transferred, the terms under which the total amount transfer occurred cannot be changed. Consequently, the 18% interest rate is the eye rate on his account. Should the credit card agent end up being persuaded to believe a technical glitch accounts for
the change, or that the customer was misled into believing he entered into an agreement based upon less interest rate for a full a year, the agent may get authorization to credit the customer's account by having an amount equal to the interest billed in month seven. However, since anticipated or estimated future interest won't ever be credited to an account, the customer will need to call back in months eight, 9, ten, eleven and twelve if he wants credit for that interest added in those months. Each time he will need to re-explain his situation and request that his account get a credit for the interest added which month. Since the customer will talk to another agent each time he calls within, he may have different results through month-to-month. Or, he may be told he will not receive any more credit. Worst Case Scenario: If the very first agent, who speaks with the client when he first calls in 30 days seven, sees any kind of on-screen documentation leading him to believe t
hat the customer knew he was agreeing to an 18% rate of interest beginning in month seven, the rate will stand and you will see no adjustments at all. Unexpected Payment AllocationsA customer takes benefit of a zero percent offer on the balance transfer and transacts a stability transfer for $10, 000. 00. He believes he's been told that he can set aside payments specifically to his purchase stability, so he goes ahead and uses the brand new card for purchases as well. Even though his purchase rate is 18%, his intention is to repay his new purchases each month therefore he pays no interest. When he takes time to examine his first (or 2nd or third) statement, he realizes that his payments are going toward the 0% interest balance transfer part of his account while his higher interest purchase balance remains unreduced and it is collecting interest at 18%. Worse Situation: Unfortunately, the worst scenario is the only real scenario. No money he pays is going to be applied to his
high-interest purchase stability until his balance transfer is repaid entirely. Differing APR's In Account SegmentsA client, who wants to buy a brand new TV, calls in response to credit cards offer he has received which promotes a a zero percent promotional price on purchases. He does not ask if the 0% interest rate also applies to balance transfers or payday loans. Instead, he assumes that it will. He decides to transfer $3, 000. 00 from the card on which a 2. 4% promotional rate is placed to expire. Then, in the forty-five-day interval before he or she receives his first statement for his new charge card, he charges a $2, 500. 00 giant screen TV and gets a $300. 00 cash loan at an ATM. Worse Case Situation: The 0% promotional rate only pertains to purchases. The rate for cash advances is 21% and also the rate for balance transfers is 18%. As a result of special provision, all payments he makes is going to be allocated first to his $2, 500. 00 purchases balance until it's
paid off. All payments thereafter is going to be applied to his balance transfer mortgage of $3, 000. 00 (plus ongoing interest at 18%) until it's paid off. Meanwhile, interest will accumulate on $300. 00 at 21% until anything else on the account is paid away. CAUSESWhile some of these problems could be caused by technological glitches, I am told that the majority occur due to "communication" errors. For a detailed knowledge of the factors which contribute to individuals errors, I refer the reader in order to my article "Could You Repeat Which? " - Communication Challenges For Charge card Agents. SUMMARYIn our current economic climate more charge card customers are seeking out low-interest promotional balance transfers in an effort to help them manage their debt. However, there's always the possibility of miscommunication or mistake regarding the terms agreed upon. When conditions are misunderstood, then getting a new card and transacting a balance transfer could be pointles
s at best, and a monetary disaster at worst. Terms cannot be changed once funds happen to be transferred, so it is vital that credit cardholders know very well what can go wrong in transacting the balance transfer. Since it is the credit cardholder who'll suffer should a balance transfer "go poor, " knowing what can go wrong isn't enough. He must adopt a pro-active strategy to ensure his transaction has the greatest chance of "going right. " To that end I send readers to my article Credit Card Balance Transfers - How to prevent Disaster. © 2009 Clyo Beck. The writer asserts her moral rights.
Clyo Beck may be the co-author of Money Saving Credit Greeting card Secrets, an indispensible and practical guide on to how to prevent credit card hassles and save money which will pay for itself many times more than. It is the best investment any charge card user can make. For more free of charge tips, or to preview the first four chapters of Money Saving Charge card Secrets without cost, visit http: //www. moneysavingcreditcardsecrets. com.
View this post on my blog: http://creditcard.valuegov.com/credit-card-balance-transfers-6-disasters-to-avoid/
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