Is Transferring Your Credit Card Balance Right For You?

If you have multiple credit cards, you likely have one with a lower interest rate than another. Transferring your credit card balances, when done right, means that you have lower interest rates, and that saves you money each month.

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Is Saving Money This Way Possible?

Don’t just jump into a credit card balance transfer. First, you need to look at how you specifically use your credit cards. You don’t want to fill up any credit or balance space you need to keep open or available for something else in your budget. Also make sure your regular budget can handle the projected new credit card payments due each month, and be mindful of potential fees. A number of credit card companies charge for balance transfers, but others don’t.

Always know the full terms and conditions of any potential transfer before you execute it, and analyze your budget for all possible implications. Keep in mind throughout all this that saving money is what you are trying to do.

Getting Ready For The Process

Transferring credit card balances can usually be done online in just a few quick moves. Usually you just have to provide your account specifics as well as the name of the bank you hope to transfer your balance to. You are likely to get asked how much to transfer, as transferring the entire balance is not automatic, nor even always possible. Be certain your new card has enough account room to absorb the transferred balance.

Keep checking your old card during and after a transfer, as outstanding transactions and automated or scheduled payments might still be pending that have yet to show up on a statement or balance sheet.

                               

What Additional Advantages Do Balance Transfers Give?

The primary advantage you gain from a credit card balance transfer is the lower interest rate, but that is far from the only perk possible. If you are lucky enough to transfer every single credit card balance you have onto a single card, then you wind up with only a single payment every month. This is far more convenient than having multiple payments spread throughout the month.

If you choose to pursue a balance transfer, you are likely going to have a number of choices you can make. The first such choice is the possibility of a zero balance switch, where any transferred balance will have no additional interest charges after it is carried over. All other balance transfers have interest rates involved, as well as possible fees or charges. Any balance transfer has agreement paperwork or documentation associated with it. Read it thoroughly to know what you are getting yourself into.

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Do Not Get Cocky

A credit card balance transfer, when done right, is a smart money management move that lets you shave your monthly bills and cut back on the interest you pay on your balances. So long as you have read and abided by the transfer terms and conditions, you might be sparing yourself up to thousands of dollars in long-term interest.

There is a danger here though. As you transfer balances off of higher interest cards, those accounts will have available credit again. Do not run those balances back up. Otherwise, you are completely undoing what you accomplished and winding up with even more credit card debt than before you started.

Related:

Balance Transfer Disasters: Case Studies

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