by Ethel Smith

Created on: March 04, 2009   Last Updated: October 22, 2009

Struggling to pay outstanding debt? Does a new credit card sound like a good idea for you right now? It may be that you owe varying amounts on store and credit cards, or just that you have one large outstanding balance on such a card. If so a balance transfer, to a new credit card may save you money, but will it really benefit your finances in the long run?

Shopping around for a new credit card will show you that, despite the credit crunch, there are still some good offers available. Comparing credit cards is easier than ever before, with the Internet providing valuable information, at the press of a button. However, some credit card comparison sites have a vested interest in promoting one card over another, so use a good cross section. Remember also that not all of these offers will be as good as they initially appear to be.

The devil's in the detail.

Most of us fail to read the small print in documents, such as credit agreements. With so many deals having twists and turns it is vital that you read and understand your agreement. In order to make sure that your new credit card is appropriate to your needs you must comprehend every last piece of information available.

Some credit cards offer a great deal if :

-you are only going to transfer a balance.

-you are sure that you can clear this balance before any credit charges become due.

-you have fully worked out the costs.

-you are positive that you will always make, at least, the minimum payment agreed, and on time.

Interest free balance transfers.

Although balance transfers may be interest free, make sure that this interest free period of time is sufficient for you to clear your debt. If it is not, then you may need to be looking for another transfer deal a few months down the road. Bear in mind that, a few months along, good deals may be thin on the ground.

Work out exactly what your interest payments would have been, on your old card or cards before you transfer your credit card. Compare this figure with an accurate balance transfer fee to show whether the swap is good value, or not. Consider also that, if you constantly swap credit card providers, it could have a detrimental effect on your credit score.

Key points to consider.

Ensure that you know:

-the exact balance transfer rate.

-how long the interest free period will last.

-any penalties. For example, a payment made just one day late could attract a fee and the loss of your interest free status. The late payment fee could also count against you on a credit

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