If you keep your credit card balance long enough, you may feel like you will never pay it off. And the longer you wait for it to pay, the more interest you will charge over time. It's a kind of debt that can be catastrophic.
In that case, it is useful to transfer the balance of the credit card. The online marketplace helps you compare lenders and see what each company is offering. Find the card that suits your needs.
What you need to know about what a balanced transfer is, how it works, and (most importantly) the potential for saving interest costs: That's right.
What is balanced transfer?
Balance transfer is the transfer of an existing balance from a high interest rate credit card to a new card (usually a card with 0% APR). These special intro APR offers last for a limited period, usually 6 to 21 months. During that time, there is no interest on the balance and all payments are sent directly to the principal.
Cardholders typically have to pay a balance transfer fee of 3% or 5% of their balance. For example, if you send $ 5,000, the cost could be $ 150 or $ 250.
How to save money with balance transfer
0 Hundreds or hundreds in total if you can afford to repay your balance before the interest offer expires You can save thousands. interest. Check out some offerings to determine what you might be able to save.
Suppose you have a 15% APR card with a debt of $ 5,000 and are eligible for a 0% APR card and a 3% balance transfer fee for 12 months. You can repay your balance before the end of the 0% intro APR period and save $ 1,073.89 in total interest. Use the balanced transfer calculator to see how much you can save.
If you can't repay the full amount before the intro APR expires, you can save money by paying most of the balance before the higher rates start.
How to choose a balanced transfer card
Not all balanced transfer credit cards are created in the same way.
There are a few things to consider when choosing a card.
Intro A credit card with the longest APR period. It will give you more time to repay the balance. Many cards offer 0% APR for both purchases and balance transfers, but in some cases balance transfers have a shorter APR implementation period than new purchases. Be sure to understand how long your balance transfer offer will last and whether new purchases will be eligible for interest.
A credit card with no annual fees or other benefits. Look for cards that also have other benefits, such as cashback rewards for making certain purchases and sign-up bonuses for spending certain amounts within 90 days. Be careful not to end up with a large balance that you cannot afford to repay.
A card with a low balance transfer fee. The minimum amount available is usually 3%, but some cards do not charge any balance transfer fees. However, if you find a card with a long intro APR period, it may be worth paying a higher balance transfer fee.
Note: You cannot transfer your balance to the same card issuer you currently have. For example, if you have a balance on your Wells Fargo credit card, transferring that balance to a new Wells Fargo card will not qualify for the APR intro offer. You need to select a new credit card company.
What you need to know before applying for a balance transfer card
Most credit card companies make payments on time Only offer an APR intro offer. If payment is delayed, the company may cancel the offer altogether.
To avoid this, set up automatic payment on your card and pay a few days before the official due date. Then create a reminder over the phone, log on, and double-check that the automatic payment is complete.
You will also need to call your current credit card issuer or log on to your account online and transfer your balance yourself. Start this process as soon as a new card is opened. The intro APR offer countdown starts when the account is opened, not when the balance is transferred. If you wait too long, your balance may not be eligible for the interest-free discount.
Most balance transfer offers are only open to consumers with acredit scorefrom 700 to 750, but some cards have a score of 650. Approve from 700 consumers. .. If your credit score is below that range, you may need to wait and improve yourcredit scorebefore applying for a balance transfer.
Having a credit card balance can be a symptom of overspending. Start tracking costs and budgeting before applying for a balance transfer. Before applying for a balance transfer, you need to correct your credit card debt habit. Otherwise, this strategy is a temporary fix, not a long-term solution.
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