Credit Card FAQ

How Do I Transfer a Credit Card Balance?

7 June 2011 by CreditCardsCo™

Credit cards are great financial tools. They help people to purchase large ticket items and can assist you in your times of need. Sometimes, though, you want to consolidate your credit cards to another one with better rates or more benefits. If so, there is a process you must undertake.

Whether you use your credit card to pay for things often or you save it for emergencies over time you might rack up quite a balance. When this happens, many people look into consolidating their credit card balances or transferring them to a new credit card with better benefits or interest rates.

Over time, it is very easy to approach the limit on your credit card. Whether you are looking to extend your credit limit or want to take advantage of better benefits, you can transfer your existing credit card balances to a new card.

Debt Consolidation vs. Balance Transfer

If you are thinking about debt consolidation or simply transferring your existing credit card balances to a new card, there are several things you need to consider:

  • How long does the introductory rate last?
  • What is the standard APR on the credit card (which is what the introductory rate will revert to once the introductory period ends)?
  • Does that card have an annual fee?
  • What other fees are charged (late fees, over-limit-fees, foreign exchange fees, cash advance fees)?
  • Is there a fee to transfer balances?

After careful consideration of these questions, and many other ones that might be personally relevant to you, you will have a better chance of finding the right card for you.

Why Are These Facts Important?

One of the most elusive facts regarding credit card transfers and debt consolidation is that credit cards that offer low balance transfer rates will eventually revert to a higher rate. They can also have higher balance transfer fee percentages. This means that you:

  • Will pay more money to transfer higher balances and
  • The longer your transferred balances remain, the more money you will pay in interest.

However, if you can justify these terms, transferring your balances could be very beneficial to you.

What Are The Benefits

Obviously, transferring your balances has many benefits. Consolidating your debt and transferring your balances can:

  • Reduce the amount of money you spend every month in payments
  • Lower your interest rates
  • Lower the possibility of paying a fee
  • Reducing the total number of fees you could pay
  • Reduce the total amount of money you might pay in fees
  • Improve your ability to pay down the balances

How Does The Process Work

Transferring your credit card balances is actually a very simple process. The first step, of course, is to take into account

  • The total balance of all of your credit cards
  • The total monthly payments
  • The total interest you pay every month
  • Any fees you might pay per month
  • The length of time it will take to pay off your balances

With this information you can then look for cards that will help to improve them. Generally, you will want to find a card with a highly competitive introductory balance transfer rate that also has lower fees and a more substantial credit limit. When you are approved for your new card, the credit card company will probably handle everything else and transfer your balances for you

Final Word

There are many benefits to transferring your balances, but you have to also weigh the risks. In the end you can save a lot of money and take advantage of other features if you are able to find a card with agreeable terms.

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