Life gets expensive and often you’re left with having to accumulate a little bit of debt in order to accomplish certain goals.
However, credit cards are handy in emergencies, offering a helping hand when there’s nowhere else to turn. Yet, if you find that your debt and current interest rate is becoming too high to manage, you have the option to take advantage of a lower interest rate credit card balance transfer.
Figuring out how a credit card balance transfer works will enable you to repay the debt without having to pay higher fees than necessary.
In the event that your current credit card provider charges higher-than-normal fees or fees that simply aren’t affordable to you, you can transfer the existing debt, even if it’s just a portion, to a different credit card company/provider at a lower interest rate.
Ultimately, credit card balance transfers allow you to save a little money while repaying debt, ensuring that you’re not overspending on fees and interest rates on top of what you already owe.
In some cases, depending on the credit card provider, there will be a transfer limit. This means that you’ll only be able to transfer a certain amount from your existing credit card onto the new credit card. The rest of the balance would need to remain in your existing account.
Understanding exactly how a credit card balance transfer works is only half of determining if it’s the right option for you. Next, you need to balance the pros and cons of a credit card balance transfer.
As with anything in life, there are always certain pros that may steer you in a particular direction. Here are the advantages of a credit card balance transfer.
You may struggle to keep track of different payments, which is why a credit card balance transfer may be the best option. You’re able to combine your payments into one, easy to remember payment.
Consolidating your payments could save you plenty of time and hassle in the long run.
Without the added interest rates on your current payment, you’re able to get rid of debt faster by repaying a larger amount.
As one of the most beneficial pros, you could be free of debt much quicker.
Get rid of longer terms and higher rates by switching to a credit card that offers the complete opposite.
You may even find one that gives rewards and added benefits simply for being a member and swiping your card. There are great incentives found in some balance transfer offers.
Just as there are plenty of compelling reasons for getting a balance transfer, you shouldn’t overlook the potential cons of such when researching how a credit card balance transfer works.
Although there are certain credit card companies that simply don’t charge fees for transferring your balance onto a new credit card, there are some that do.
Before moving your debt, make sure that you’re aware of any balance transfer fees.
It may seem extremely easy to move debt from one credit card onto another, but it could cause you to continuously follow this trend and end up with debt in several spots. Before you know it, you may find yourself falling into the debt more with too many credit cards to pay off.
Tips for saving on interest with a balance transfer:
One of the most crucial steps to figuring out how a credit card balance transfer works is by doing thorough research to ensure that you’re choosing the correct credit card company. If you are eligible to transfer, keep in mind:
Once you’ve done your research, it’s time to choose a credit card company. Find a credit card company that requires no balance transfer fee. You could save plenty of money over the length of your repayment period.
You need to provide the correct information in order to complete the credit card balance transfer. Have details pertaining to the account you’re sending the balance from and the amount you want to transfer.
It’s time to let the bank offering the balance transfer know that you’re ready to transfer the specified amount. They’ll get in contact with your existing bank and provide the information given above. The process normally takes between one-two weeks to complete.
Once finalized, you’re ready to start making payments on your new credit card.
Figuring out how a credit card balance transfer works require some research and consideration to determine if it’s a beneficial option for you. Whether you have a small amount you want to pay off or a hefty APR that’s keeping you from meeting your goals, balance transfer offers can be quite appealing.
Regardless of your financial situation, debt doesn’t have to weigh you down when there’s an option to pay lower interest rates and commit to more beneficial terms.
Learn more about managing credit cards and personal debt: