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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:

Should you let your kid have his own credit card?

Fact: there is already an increase of teens and college students who have their own credit cards. Credit card companies now aim on the two groups since they are the ones who spend more money than adults.

Educate your child on how to manage spending with a credit card. Parents an even use instances in the present state of affairs as an example to discuss to kids the pros and cons of credit cards.

Smaller credit limits are usual with these types of cards and while it may be easy to apply for one, credit card companies charge large interest rates and fees to the teenage credit card holders.

People who are below 18 are not legitimate in obtaining credit cards without the consent of their parents. Unfortunately, some kids fill out forms and receive credit cards without the knowledge of their parents. To avoid this, talk to them and help them realize the importance of beginning a solid credit history with their first card. Emphasize that it is of utmost importance to their future.

As a parent, start by reading the guidelines with your child. Make sure you call to attention all the terms written on the fine print. Avoid coming to the rescue if the bills get way out of control. This will teach him to be responsible in handling his money. A credit card spent by a teenager and paid by his parents initiates bad credit habits

Let the child bear in mind that his credit card sho uld be used in emergencies only. Monitor ALL his spending activities. Some credit cards even allow the parents to create their own credit limit for the supplementary cards. This is very logical especially if you are too busy with your career.

Parents can help their kids spend sensibly with the correct use of credit cards. At this early stage, it is better to prepare them in the reality of life by teaching them not to abuse its benefits.