Balance Transfer Credit Cards
Keep transferring balances with balance transfer credit cards
Balance transfer credit cards are a form of credit card which is in fact
beneficial for the card holder. These cards offer one credit card company to
steal your debt from another credit card company through balance transfers. So
basically, these cards move the balance from one credit card company to
another. There are many companies that offer new cards with a low APR, or even
a 0% APR, for a set amount of time! So if you are in credit card debt, it's
best to grab this offer to avoid accruing more interest to your debt amount!
And if by chance you don't pay off the balance before the introductory rate
expires, you can always apply for a new credit card with another low
introductory rate, and have your balance transferred once again.
Make clarifications before making balance transfers
When you opt for transferring your credit card balance to a card with a
super-low introductory rate, make sure the fine print has been read, and
appropriate questions asked to the credit card company. Otherwise, you may end
up paying extra fees and a much higher interest rate than expected!
First and foremost, it must be found out as to how long the introductory rate
lasts and what the card’s APR (annual percentage rate) is once the teaser rate
expires. The longer the introductory rate is in effect, the more money will be
saved. Check to see if the teaser rate applies to transferred balances or to
transfer balances or to both, and if the card has other fees like annual,
over-the-limit and late fees. Some companies charge balance transfer fees as
high as 4%, where the higher the balance is, the higher is the transaction fee.
There are also cases where the introductory rate may jump up after one tardy
payment. So if you fall behind on payments on another card, the new card may
raise its rate.
Verify with the banks on the balance transfer:
When the terms of the offer have been read, the balance transfer form has to be
filled carefully as incomplete information may halt or delay a transfer. It is
also advised to make the minimum payment on the old card when waiting for the
balance transfer to take effect, which may be from 2 to 4 weeks, as the last
thing a person who is minimizing their credit costs needs is to pay an
additional $29 late fee and penalty rate!
Once the new card company sends a notice informing the completion of the
balance transfer, the old company has to be called and verified. Record the
name of the person spoken to, the time, date and what was discussed. The best
way to avoid any mix-ups is to wait till the old credit company sends a zero
balance statement to you. If this has not been given, make sure to request for
one. After this, the old card can be cancelled, as it wouldn’t be needed any
more.
Credit ratings aren't affected by balance transfer credit cards:
It should be noted that there is no limit to the number of balance transfers
one does. In fact, the more balance transfers one does, the more active you may
look on the credit report, thus making more banks attempt to get you transfer
your balances to them! The only limitations one may get here is on the credit
offers that are available to you personally. When you open new lines of credit
for transfers and simultaneously apply for another loan like a mortgage, the
mortgage bank may see the open lines of credit and think that you are risky as
you could get into trouble spending that available credit. Here too there are
exceptions if there are no late payments made to any of the banks. Being late
in payments is in fact the biggest mistake one can make. Most credit cards
offer a grace period for repayments for balances due to purchases, whereas cash
advances and balance transfers accrue interest immediately. So the key is to
pay off the card amount within the grace period every month.