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How to Transfer Credit Card Balance to another Card

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Getting a new credit card may seem counterintuitive when you are already in deep credit card debt, but believe it or not, it may be the best financial move for you. If you know how to take advantage of a credit card balance transfer, you will end up with smaller and more manageable monthly payments.

Understanding credit card balance transfer

This process involves the transfer of your credit card account’s balance into another account from a different credit card company. Many credit card companies use it as a strategy to entice people like you to switch to them, with attractive perks like low interest rates, loyalty points, interest-free periods, or a combination of those incentives.

The order of payments in each of your credit cards determines the balance that needs to be paid first. In most cases, you initially have to pay off the balances with the lowest rate because they tend to be paid off sooner. To make the most of the balance transfer, you should avoid taking cash advances and making purchases.

Things to consider

The process is normally fast, and nowadays, automated features make it easier to do balance transfers. But should you transfer your credit balance to another credit card? Your decision should depend on these three factors:

  1. The normal rate

Look at the credit card‘s normal interest rate. The lower it is, the better for you, but the worse it is for the credit card provider. The transferred balance is subjected to the similar rate of your card‘s purchase rate.

  1. The teaser rate

The new credit card company normally offers the lowest rates to new clients, enticing them to do the balance transfer. The most common teaser is the 0% interest rate, which is given when you open the new credit card account. However, this is only temporary, which means it lasts for only six to 15 months. After that, the remaining balance is subject to the purchase rate. Determine the duration of the offer to be wary of the sudden increase in interest rates.

There is also such a thing as a “fixed life of loan rate,” an offer that lets you have a low fixed rate until you can pay your transferred balance in full. However, it is only guaranteed as long as your account is new.

  1. The transaction fee

This fee is generally the credit card company’s commission and it is a straightforward transfer of your money to the company. It often varies from the 1% to 5% transferred debt.

Do your research

It pays to do your research on any underlying terms when considering before you transfer your credit card balance to another bank. For instance, make sure what is “free” is actually free, and that the 0% offered to you applies not just on the balance transfers but also on your purchases.



Featured Credit Cards:

RCBC Bankard Diamond Card


FEATURES:

  • Finance Charge: 2.75 %
  • Balance Transfer Rate: 1.488% (6months)
  • Annual fee of only Php2,500
  • Cash advance service fee 300% or 5%, whichever is higher

MABUHAY MILES WORLD MASTERCARD


FEATURES:

  • Enjoy an annual fee of only Php6000 for the primary card and Php3000 for the supplementary cards. But guess what, the first year is actually for free for both cards
  • Pay a cash advance rate of only 3.25%
  • Cash advance fee of only Php50 plus 5%, whichever is higher.
  • Get individual Dollar and Peso billings for your international and local transactions.
  • Avail of free flights out of the country with the Mabuhay Miles World MasterCard that has the lowest point of Mile conversion of only Php38!
  • Relish on customized assistance as you get special access to the Allied World Service.

LJC Credit Card


FEATURES:

  • Monthly membership fee of Php80 and P60 for the extension
  • Get year round discounts
  • Avail of birthday discounts and enjoy fine dining all with RCBC Bankard LJC credit card

Landmark – Anson’s Card


FEATURES:

<ul>
<li>Free membership for 12 months</li>
<li>Lowest monthly fee of Php80 per month</li>
<li>Earn rewards when using your cards and exchange them for free gift certificates</li>
<li>Avail of Weekly Wednesday discounts</li>
</ul>

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KEEPING AWAY FROM CREDIT CARD PROBLEMS

Once used properly and efficiently, credit cards are handy and suitable devices for just about anyone who is of age. It can even assist you with upcoming activities like buying a house, getting another degree and sometimes going for a leisure trip somewhere abroad with family and friends. Before you allow your teenager or yourself to get a credit card, know some of its advantages and understand some of its procedures.

A credit card can allow you to bUy products or services which you need right now but can’t afford to pay all of it at once. Sometimes it’s often the single way to pay for hotel accommodations, car rental fees or airline tickets.

Credit cards also allow it holders to purchase items over the phone or sometimes in the internet. You can shop and pay your monthly bills in the convenience of your very home! Some credit card companies offer virtual banking that lets you shop and transact business online.

It is also safer to carry a credit card than to carry cash around wherever you go. For the most part, credit cards are very useful in instant emergencies like accidents, car breakdowns or calamities.

You could actually even give anything you purchase protection, avail of travel insurances, free miles and even cash back bonuses if you charge your transactions with your credit card.

One fact is for sure; having a credit card is convenient at times but also remember that a credit card tempts you to spend money you don’t have. Always have the sense to follow up on your credit card to avoid overspending which can give you a big headache in the future. Use your credit cards in ways that you benefit from them, not them benefiting from you!

Understand what you’re getting into before you start building up credit card balances. Once used wisely, they are an absolute help in budgeting. But if not, they will turn up to be your greatest nightmare.