So What Is So Great About Balance Transfers

Category: Finance, Credit.

Are high credit card fees giving you sleepless nights? The following article can be used as an introductory guide and a primer on the use of balance transfers that discusses the intricacies of balance transfer details.

Think smart: balance transfers could be an intelligent short- term solution. Transfer the weight off your shoulders and get a balance transfer credit card with a lower rate of interest. If you are not really keen on getting a new card, tell your existing company that you want to transfer your balance to another card that offers a much lower rate. However, make sure to run through the terms and conditions of the new balance transfer card, to make sure you win in the long run. Your existing credit card company just might offer you a better deal. So what is so great about balance transfers?

If not, then go ahead and call the competition! Balance transfers to a card with a lower rate can significantly cut down your interest and fees. If you are fortunate and your credit is good enough, you might qualify for a 0% interest card for 12 months on balance transfers and purchases. The most common rate of interest offered by companies on balance transfers is 0% for 3 to 12 months. Be aware, that some cards, however, will link the introductory annual percentage rate( APR) to the billing cycle of the card. How Do I Get One? There could be some additional perks available on your balance transfer card as well: 1) Your new card may charge no annual fees. 2) The grace period on payments might be longer. 3) Rewards like cash back on purchases might be available. 4) Discounts from certain retailers, and even car, identity theft protection insurance can be thrown in as well!

You will be required to go through some basic application procedures and paperwork on a balance transfer. These function just like normal checks but there are some things to be aware of, such as expiration dates. You could write a balance transfer on one of the convenience checks that the card issuer will provide after getting approval on the card. Time can cost big money, with the old, in this case interest rates snapping at your heels. The fees for balance transfers are similar to that of cash advances, fees will be, but often times waived for the very best card offers. How much you can transfer will depend entirely on the credit limit of your new card.

If there are associated transfer fees on the card, it is advisable that you avoid transferring small balances, as the transaction fees might undercut your potential savings. Late fees on these card offers are particularly expensive. Some additional fees on these cards might include: 1) Late Fees: Once the introductory period on your balance transfer ends, you will start incurring finance charges on the remaining balance. In order to avoid these exorbitant fees, make sure that you mail payment well in advance of the due date. Banks either charge a flat fee, such as$ 10 or$ 15, or a percentage, such as 5% , of the minimum payment due, for example. 2) Over- Credit Limit Fees: Each time you charge your card beyond the credit limit, the bank has the ability to impose a fee. If you are using an ATM deposit, stay informed about the processing time of your payment.

It is possible that many of these aforementioned fees will gather simultaneously( in addition to interest charges) during the same billing period! The most important thing to remember regarding balance transfer credit cards is to make all your payments on time and pay off the outstanding balance within the introductory time frame. Banks usually charge$ 10 or$ 15 for this fee or up to 5% of the amount on the exceeded limit amount. 3) Lost Card Replacement Fees: If you ever happen to lose your card, some banks might charge you anything between$ 5 and$ 10 for a replacement. Usually, there is no grace period offered up for balance transfers and unless you have snapped up an introductory 0% APR, interest will begin to accrue immediately. Your initial repayments will first go towards clearing the balance transfer amount before making a dent in any outstanding balance created from recent purchases with the card. The calculation can get a little tricky too.

So if you want to avoid this mess, keep a separate card for balance transfers and another one for regular purchases. You should be keenly observant of the expiration date of your promotional offer. When the Joyride Ends. Once it ends, you will be charged the normal rate of interest. Your credit history will determine your post introductory APR on your balance transfer credit card. All remaining purchase and balance transfer amounts will be subject to a much higher APR and significantly higher finance charges. So if this APR is higher than the rate on your old balance transfer card, you could incur more expensive finance charges if you carry a balance from month to month.

Just make sure that you transfer your balance to a new card that offers both a lower promotional rate as well as a lower ongoing APR.

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