How to Apply For Balance Transfer Credit Cards
Balance transfers offer many benefits. In fact, it’s easier than ever to transfer balances when using online resources or credit cards for purchases. Balances can be transferred quickly, conveniently and effectively. But to maximize a balance transfer, have a strategy for paying down the balance and read the entire terms.
A few things to consider before choosing balance transfer offers. Don’t make transfers just to get low interest rates. Most cards charge a balance transfer fee, which can be expensive if you don’t manage your payments appropriately. The key is to transfer high-interest debt to cards with low or no balance transfer fee. Look for cards that offer free balance transfers or cash back rewards. These bonuses will help you pay down your debt faster.
Some cards offer introductory APR, or interest rate, reductions up to five percent. These cards offer balance transfer offers, but the key is to find the best introductory APR to reduce your out-of-pocket expenses. If you have excellent credit, you may be able to qualify for no introductory APR at all. Some cards offer zero percent introductory APR on purchases for six months or longer.
When deciding whether to take advantage of balance transfer offers, it’s a good idea to take a close look at your current financial situation. Is more credit card debt better? Or do you need to make money on your existing debt in order to make money when you transfer balances? Remember that transferring your debt only makes sense if you have an income to repay the new debt.
If you’re consolidating your debt and make these transfers, keep in mind that you’ll also be making larger monthly payments. That’s because you’ll be transferring your balances to a lower interest rate account. Make sure to shop around for balance transfer credit cards that offer low balance transfer fees. Also check for the minimum monthly payment requirement. Most credit cards will only offer you the lowest amount required for the entire month.
Balance transfer cards also have other features, such as cash back programs and airline miles programs. Some cards also offer protection against fraud. Some cards may offer incentives to maintain your selected credit limit. Look for cards that offer the lowest credit utilization rates and lowest balance transfer fees. These cards can save you hundreds of dollars every month, especially if you make your monthly payments on time.
Balance transfers are ideal for people who need a jump start on their financial efforts. But make sure to read all terms and conditions before applying. Balance transfers don’t have any tax advantages. Check with your current card issuer for details on balance transfer interest rates and fees.
If you need help, there is a good idea to seek professional help before you begin a balance transfer program. An experienced debt counselor can help you establish realistic payment plans, assist you in building up your financial resources, and teach you how to avoid making impulse buying. Credit counseling is a good idea if you are having difficulty making your monthly payments or if you feel you are overpaying for your new card. It’s also a good idea to contact your bank and ask them for a balance transfer offer.
Once you’ve decided to take advantage of balance transfers, it’s important to stop making new purchases. This can be hard, but is a necessary step if you want to get your finances under control. New purchases lead to added debt and late payment fees, both of which are hurting your credit score. So even if you’re not committed to a budget, don’t make new purchases unless you absolutely have to.
Once you’ve established a reasonable budget, you’ll find that your interest rate and other fees will likely be less than they were when you first started paying high interest rates and fees. And it’s important to remember that transferring your balances won’t reduce the amount of money you actually owe. Even though you can pay off several different cards at once using the introductory interest rate, this will only lower your monthly payment for a short period of time. Before you start spending again, it’s a good idea to look at whether you really need all those separate cards or if you can just make one lower payment for all of them.
The best way to find out whether you really need to transfer balances is to call your current card company. Find out what their policies are about transferring balances between cards. Then determine whether it’s better to pay interest while you pay off the balance or to simply pay the interest while you’re paying down the balance. If you find that there’s a better deal available somewhere else, go for it. However, in most cases, the benefits of transferring your balances will offset the small amount of interest you have to pay to close the deal.