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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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MANAGE YOUR MONEY: USE YOUR CREDIT CARD WISELY

Like majority of things in life, credit cards give us power that we could use to maximize our way of living. We should learn to use it wisely to avoid any hassles in the future.

But what are really the advantages of having a credit card? We, at comparecreditcards.com, did a survey about the merits of having a credit card and you will be surprised at what came out…

It is a lot easier to buy things with a credit card. It gives you purchasing power that can let you buy things without you having to carry huge amounts of cash around.

You get added security if in case something you bought got lost, stolen or damaged. With both your credit Card Company and your credit card statement guaranteeing you made the purchase, you could actually get insurance on whatever you bought.

Having a good credit history not only helps you apply for a new credit card, but also helps you build a solid financial foundation when applying for other things like loans or sometimes even jobs.

Although we should avoid any expenses that is way out of our budget, it is sometimes unavoidable due to emergencies like fire, floods and the like. But the worst thing is it leads to large purchases in huge amounts of money. With a credit card, you can use money with cash advances and worry about paying it later once you’re back on track.

In addition to those, a credit card also presents further benefits like discounts, free air miles and insurances. But you have to remember that credit card companies start making money once you can’t afford paying off your charges!

The benefits of having a credit card are real and are very helpful on the condition that you take into account your spending limits.

Life is made easier with a credit card, but if used unwisely, they become financial break downs for you. If you do decide to get yourself a credit card, keep in mind these following rules:

  • Track all of your purchases.
  • Never spent beyond your budget.
  • Settle your balance at the due date.

Always bear in mind the responsibility of having a credit card. Spend within your budget and use it wisely.