Tips To Transfer Balance Credit Cards

Introduction

A transfer balance credit card is an facility where a Card company offers to pay off your debts on your old card and move the debt to a new one. If for example you are paying 15% on your debt with Company A. Company B then offers you, say, 0% for six months and hopes to reel you in. If you take the offer, it will pay off your Company A debt and put the same amount of debt on the new B card and for at least for six months, it will not charge you any interest on that amount. You will possibly have to pay a small fee to the new or old company in the course of transition. It is a normal actively nowadays in almost all credit card issuers and is used to attract new customers by offering such incentives as a low interest or interest-free period. A customer can dig him/herself out of debt by and transferring balances from high interest rate cards and taking advantage of low interest rates on new credit cards. Tips to get the most out of these transfer balance credit card transfers include the following.

Step 1

From the multiple credit Card companies offering Transfer Balance Credit Cards search for the best. While most of these companies offer six to seven months some are now offering eighteen months at zero percent annual percentage rate (APR). The best in the market is now offering twenty one months 0% APR. Ensure you land on the best deal and compare terms. Use a balance transfer calculator to assist see how much you can save on transfer balance credit cards.

Step 2

A good credit score will make many credit card issuers want to have you as their customer and a high balance on a card with a high interest ratewill give you bounty of reason to balance transfer credit. Knowing your credit is hence a good factor to consider being able to take care of most of these advantages that accompany transfer balance credit cards.

Step 3

When looking for the credit card company to get transfer balance credit cards, there are two interests rates that you need to consider. First is the interest rate on the principal amount you are switching over and second is the rate of interest on all new purchases you make with the new card. The zero interest mostly applies to the principle balance transfer and not on new purchases there after. If the interest on new purchases is significantly higher, a switch may not be a good idea especially if you planning to continue spending with the new card.

Step 4

Be aware of the card providers that are involved in negative payment hierarchy, this is a trick that many card companies use while wooing clients using the zero percent balance transfer credit. If for example on the new card you have a balance transfer, a purchase and may be an ATM withdrawal and you pay the company at month end, instead of paying off the ATM withdraw which attract more interest first and then purchases, the company pays off the zero percent balance transfer first leaving withdrawal and purchases to attract more interest on your transfer balance credit cards.

Step 5

Upon balance transfer, stop using the old transfer balance credit cards since that will only lead to adding your debt load and it is what you were trying to reduce at the first place when you were doing the balance transfer credit.

Step 6

Even if you are not using the old transfer balance credit cards, do not close the account. Keeping the account open and active will be to your advantage since it boosts the credit score rating as you continue paying the balance amount using the other cards account.

Some More Tips

1. Stop using the old transfer balance credit cards when you get new ones.
2. Maintain a good credit score.
3. Watch out for negative payment hierachies in card companies.

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