Are you wondering which credit cards are the best for balance transfers? Well, you are not alone; many surveys indicate that on average, each household has close to $5000 in credit card debts they are yet to pay or they are struggling to pay. In this article, we share balance transfer secrets that will enable you to clear your debt within a shorter period. We also included things to know before you make your balance transfer.
Minimum Payments
If you are only able to make minimum payments, any new purchases you make with your card will get charged the regular higher APRs. You would, therefore, end up with a higher debt than you expected by the time you clear your transfer balance. The only way to escape that is to pay more than the minimum payments you agreed to pay. That way you will be able to service both the low-rate and high-rate balance.
Avoid Using Business Credit Cards
The CARD Act that protects you by making sure that some of the payments you make monthly to service your credit card debts will be applied to low-rate balances as well. What many card users do not know is that the CARD Act does not apply to Business Credit Cards. If you used a Business Credit Card to make a balance transfer, all the payments you make would be applied to low-rate balances while the high-rate balances will remain un-serviced.
Transfer Charge
Some cards have balance transfer fees that are a percentage of the transfer balance. That could be as high as 5%, meaning you will have to pay $225 to transfer $4500. You will, therefore, have to take transfer fees into consideration when making balance transfer decision.
Peer-to-Peer Lenders
If you have a good credit score, then you should consider joining peer-to-peer lending clubs. You can then get a loan from them to clear your credit card debt. Their interest rates are much lower than what credit card providers offer you.
We hope these balance transfer secrets will be helpful in managing your credit card debt.
