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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.



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Featured Articles:

HOW TO PICK THE BEST AMONG THE REST: CHOOSING THE RIGHT CREDIT CARD FOR YOU

With all the offers you get form credit card companies, you may feel a little overwhelmed about what kind of credit card suits you best. Here, at comparecreditcards.com, have a few tips for you in choosing the appropriate credit card for you before you say the big “yes” to any credit card company or get carried away with solicitations over the phone or via mail.

Find out your basic goals. Ask yourself; Why do I need a credit card? You can’t just go and apply for a credit card just to be “in” with another crowd.

Next, determine how much you are prepared to pay for the annual fees and how much you plan to spend every month. This will help you start selecting a credit card that is within your budget.

Now do the research. Go to online resources (like comparecreditcards.com) to find out everything you need. If you have free time, drop by at the banks to inquire personally about all the things you need to find out. These should include the following:

  • The annual fee
  • Required minimum period
  • Finance charges
  • The credit card issuer providing the credit line and its size
  • The extension period (interest free days) before the payment should be made.

Review all the credit cards your have researched. Base your choice of credit card to the one that bests suits your lifestyle and personality. Always remember to choose the credit card that proposes the BEST DEAL for you. For example, don’t go for a credit that offers you free miles if you don’t have any plans of traveling abroad! Get the point?

Now that you know what to do, start looking up your resources and find out the best credit card suited for you.