A credit card balance transfer refers to a means of moving your credit card debt from one plastic card to another. During the process, your outstanding balance remains the same; however, you may be able to acquire a lower interest rate. In some cases, you get a 0% interest rate for a specific duration.
With the right credit card balance transfer, especially with one that offers 12 or months with no interest charges, you eventually save money, and pay your credit card debts faster and in time.
Benefits of Credit Card Balance Transfer
Firstly, you can save on interest charges for a set of a period. During This time, you can pay off the debts within the zero percent introductory period. Besides, it gives you an opportunity to make all your payments into one. Thus, you need not keep tabs of the multiple monthly installments.
What to look for:
- Zero percent Annual Percentage Rate (APR)
- Look for a that offers zero-percent APR for as many months as possible. The longer the duration, the easier it is to pay the outstanding balance.
- Low Balance Transfer Fees. Usually, the average balance transfer fee is between 3-5 percent of transferable balance. Ultimately, these fees will translate into your outstanding balance on the new card, besides being factored in the monthly payment.
- Ability to transfer the balance for more than one card. If you have multiple cards with a high APR, your new card should allow you to transfer all the balance at once.
How to Do a Balance Transfer
Below are five easy steps to complete a balance transfer:
- Research the zero balance transfer credit cards.
- Apply for the best choice. You will need to evaluate the introductory period, fees and interest rate.
- Specify your transfer from the existing card. You need to enter the details of the old card (card number and account balance) when applying online. Once the details are received, the new issue will approve transfers.
- Notification. If there are additional transfers, notify the new issuer through their website or phone.
- Request checks.
Choosing the right balance card
When selecting a card for a balance transfer, you need to perform research. Most cards will accept transfers; however, the action will only make sense if it saves you money. Thus you will need to know:
- The annual fee. Cards with no annual fees are good for transfers.
- The duration for the promotional period. Cards designed for transfers should give you a room to breathing space to pay your debt. Hence, select one that offers 0% period.
- The balance transfer fees.
- The interest rates. Credit balance transfer cards should have zero-percent or lower introductory transfer rates.