21 June 2006

11 deals to avoid, or not

Money.cnn.com comes through again, this time with advice on 11 financial deals one is likely to encounter. Mostly obvious stuff, but mostly good advice. An example:
Balance transfer cards

You open your mailbox to find a pre-approved offer for a credit card charging 0 percent interest on balance transfers for 12 months. Sounds tempting, especially since you're paying off a balance at a high rate on another card. Deal?

DEAL IF...you plan to do all of the following: Put only the balance on the new card, never pay late, and pay off the entire amount in 12 months. (First you'll want to find out how much the fee for the transfer is; you don't want it to cancel out the benefit.) If that much discipline makes you cringe, read on.

NO DEAL IF...you're not so diligent. This card charges 0 percent on balance transfers, but unless otherwise stated, not on new purchases. What you charge gets hit with a higher rate (sometimes 18 percent), and your payments typically go toward the zero-rate balance first.

Even if you're slowly paying down the balance, the finance charges on new purchases are piling up.

Plus, miss a payment - oops - and the rate on your balance transfer could go from 0 percent to 30 percent in a second.

Why they chose the annoying "Deal, or No Deal" format, I don't know, but at least the article doesn't have Howie Mandel.


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