How to Take Advantage of a Balance Transfer Credit Card to Erase Debt.

 

If you are struggling with paying off any credit card balances that you have and you keep seeing them grow month after month because of interest charges, then take a look at a balance transfer credit card. This is a credit card option that allows you to transfer an existing balance from one or more cards over to a new one. Credit card companies offer balance transfer credit cards to try and draw you away from your current credit card company to theirs. And they are willing to give you some great money saving benefits in the process. When utilizing a  balance transfer credit card to move your current credit card debt over to a new card you will receive an intro APR rate that will likely be less than the interest rate you are paying now. Also, if you have debt on multiple cards, then it will allow you to consolidate all of them onto one card so that you can make 1 payment a month. Making your financial life simpler.
Note: In order to qualify for a balance transfer card you need to have good to excellent credit. If you do not have good credit, then work on improving your credit and then you can see if you qualify for one.

 

Balance Transfer Credit Card Intro APR

The only reason you would want to transfer your current credit card debt over to a balance transfer card is to take advantage of the intro APR rate. By getting a lower interest rate you will save money and more of your payments will go towards actually lowering the principle amount you owe.

 

All balance transfer cards are different so you need to look at your choices carefully. The market for balance transfer cards is very competitive and almost all of your options will offer intro periods of 0% APR. That’s right, your intro interest rate on a balance transfer credit card will most likely be 0%. Make sure you read all of the fine print before choosing though. The reason it is called an “intro APR” is because it will expire at some point. After it does so you will start being charged interest again on whatever balance you have yet to pay off.

This is also something that you need to take into consideration before choosing which card is right for you. Some cards offer their intro APR for 6 months and others can offer it for 18 months or more. The card with the longest intro rate will give you more time to pay off your balance, but that doesn’t mean that it is your best option.

Note: If you think you can just switch to a new balance transfer card after the intro rate expires you are wrong. You may get away with it once, but every time you get a new credit card it is being noted on your credit score.

 

balance transfer credit card

 

Balance Transfer Fee

A balance transfer fee is the amount of money it will cost you to transfer your current credit card balance(s) over to your balance transfer credit card. This will usually be a percentage of the total you are moving over. Most balance transfers cards have a balance transfer fee somewhere between 3% – 5%, with some cards even coming with no balance transfer fees. This is something that you need to find out before you make your decision. The balance transfer fee that you pay will be a big factor in how much you actually save by using a balance transfer credit card. Just because you found a balance transfer credit card that come with a $0 balance transfer fee doesn’t mean it is the right choice for you. The intro APR time frame might not be long enough for you to pay off your entire balance.

 

Even if you have to choose a card that has a balance transfer fee, you are still making a good decision because you are giving yourself a window where you won’t be racking up interest. Come up with a payment plan that gets you to a $0 balance by the time the intro 0% APR offer expires and you will see that paying the balance transfer fee was well worth it.

 

Consolidate Credit Cards

If you have more than one credit card with a balance on it, it can be hard to figure out how much interest you are paying each month, and also when the due dates are for which cards. By using a balance transfer card you can transfer all of your balances over to one card. You will have 1 payment each month and you will see how much you are paying in interest, if any, if you are taking advantage of a 0% APR intro rate. By making your financial life simpler you will make it easier for yourself to get out of debt by reducing the interest you are paying each month.

 

Remember that the only reason that you are getting a balance transfer credit card is to get yourself free from the credit card balances that you currently have. It can be very hard to do that when a good portion of your payments each month are going towards interest. A balance transfer card can solve that problem by greatly reducing the interest you are paying for a certain period of time. If you let that time go by and you still haven’t paid off the full balance, then you will be back to paying a pretty high interest rate on what principle is left over.

A balance transfer card allows you to consolidate the credit card debt that you have onto one card, with one payment, with a lower interest rate. Making it easier to understand where your hard-earned money is going. It would be nice to be able to pay off your credit cards in full each month and not waste your money by paying credit card interest. If used correctly a balance transfer credit card can get you back to just that and allow you to save or spend your money on the things you want.