Credit card balance transfers are a process where the debt from one card is moved to another. There are a number of reasons to transfer the balance of your credit card.
Why transfer your credit card balance?
Transferring the balance of your credit card allows you to consolidate multiple debt payments into a single source. This will potentially save you money on interest. After you have elected to transfer your credit card balance to a single card, there is typically an introductory interest rate available. This rate is typically lower and will help you to pay off the amount of debt that you have accrued.
How to transfer your Credit Card Balance
The first step is to speak with your bank or credit card company. They will inform you how to go about this process. There may be the possibility that you can do this entire process online or over the phone.
You will then be transferring your debt to a new card. There is typically a small fee to transfer the balance onto a new card. When transferring your debt, it is important to take into account that you will only be able to transfer up to the limit on your new card.
If the limit on your new card is sufficient, all of your debt will now be on this other card. There is usually a lower introductory interest rate on the new card, which will expire after a period of time. It is advisable to know what your rate will raise to, and when the rate hike will occur.
How to take advantage of Credit Card Balance Transfers
A Credit Card Balance Transfer is a life line which will help you to organize your debts into manageable chunks. The easiest way to deal with it is to keep in mind that the debt on this card should not be added to. As such, it is wise for you not to use this card for any new purchases.
Following a balance transfer, it is not unusual for you to be ineligible for further balance transfers until that card is paid off. Take advantage of the new cards lower interest rate by paying off the balance as quickly as possible. This will help you to get your finances in order and reduce any fees or interest that you will have to pay.
*Editorial Note: Any opinions, analysis, reviews, or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.