Taking Advantage Of Balance Transfer Credit Cards

Balance transfers are great if you are currently saddled with a high interest rate, or your credit card rate has increased. As creditors can increase the rate periodically, you may find that you are paying much higher rate than you what you were initially offered. If you have low credit score, you can only qualify for high interest credit cards. With balance transfer, you can get the advantage of great credit card offers and improved credit and save hundreds of dollars in process.

When you undertake balance transfer on credit cards from 24 percent to zero percent, you save hundreds of dollars in interest. Generally credit card providers offer balance transfers to entice you to open a account with them. However, you should keep in mind that opening numerous accounts is not a good idea, so you must limit the number of credit cards you open.

You must search for best balance transfer offer before performing nay balance transfers on credit cards. Suppose you transfer your balance to a card which offers you 6 percent annual rate and then you get a zero percent APR offer within a week, you would definitely be missing on a great offer.

If the balance transfer is a promotional offer, then pay it off quickly! Many people use balance transfers on credit cards to secure a zero percent or low APR offer and save on the interest rate. However, you should read fine print of each offer. All low interest offers have limited introductory rates and often expire with 60 days to 6 months after opening the account. Michael writes for Moneypedia where you can read more about balance transfer credit cards and other financial topics.

Occasionally the same terms will apply as to purchases that may be interest free until the payment date for the statement on which the transfer appears. More often such transferred balances move immediately to the full purchase rate. Credit card balance transfers involving transfer of funds from a high credit card or a store card to a low- or zero-APR credit card will result in a reduction in monthly for the card holder. A is an especially low rate that a credit card company offers to new customers to entice them to transfer their balance.

It is a lure for catching new customers. With an extra low initial rate, transferring customers have lower than normal which ultimately means lower initial monthly outflows of money to the credit card company. The 0% rate is the most common when a new credit card account is opened. This teaser rate is temporary.

The duration of teaser rates vary from (typically) 6 to 15 months, after which the remaining transferred balance is subject to purchase rate. Teaser rates in the UK can often be longer than in North America, with (typically) 6 to 35 months available for UK balance transfers. Failure to ensure the account is current (payments made on time) may result in the withdrawal of the offer rate.

Customers should pay attention to the length of time of the opening offer, since once it is over there is a sudden increase in rates. This increase is the credit card company's method of making extra profits to make up for the losses of charging the lower introductory rate. Of course, this can be countered by switching to yet another credit card company.

A low rate that is fixed until the transferred balance is paid in full. This type of offer is usually guaranteed only as long as the account is current (see Teaser rate). Whilst this allows the borrower to save interest on their existing debts without the need to initiate further balance transfers once a teaser rate offer expires, the fixed offer rate is higher than the limited duration teaser rate offer.

A transaction fee is a commission earned by the credit card company earning one's business and is a direct transfer of money from the user to the credit card company. This varies from (typically) 1-5% of transferred debt - sometimes with a maximum capped amount, but otherwise an uncapped percentage. Because transferring to new credit cards often results in lowered rates, one can repeatedly make use of this process to save quite a lot of money over the years. The idea is to switch to a new credit card the moment the previous one's teaser rate has expired.

There is a caveat: the credit card contract may include a clause preventing the credit card holder from transferring the balance a second time within a certain period of time. There may also be ways of extending the teaser rate or at least preventing it from disappearing prematurely. This method is often advocated by personal finance self-help sources. To deter this type of behavior, many credit card issuers have stopped offering no fee balance transfers. Additionally, under pressure from various Federal agencies, card issuers have raised minimum payment requirements to ensure cardholders actually pay off their balances. These changes have made it less attractive to carry debt, despite any promotional APR that may be included in the offers.

Earn big‑time cash back that never expires. A credit card balance transfer can be a great way to save money on higher interest rate debt. There are also other benefits that can come with consolidating your debts into just one payment. What exactly is a balance transfer, A balance transfer is when you pay off the balances on existing credit cards or loans by transferring them to another credit card account. In some cases, you may be charged a fee to complete the balance transfer—typically a percentage of the transfer balance.

You can only transfer an amount up to your credit limit on the new card. 5,000 (including any balance transfer fee) of that existing balance. How do I complete a balance transfer , • When you respond to a balance transfer offer, you’ll indicate who you want to pay, the account numbers, and how much you want to transfer. • Once you’re approved for the balance transfer, the credit card company contacts your creditors or billers on your behalf and pays them the amount you indicated.

It can take up to two weeks for this process. • If you have any payments due before that time, you’ll want to go ahead and make those payments by their due dates to avoid late fees. Tell me more about balance transfer fees. Credit card balance transfers may charge a balance transfer fee—usually 3% to 5% of transferred debt. What are the benefits of a balance transfer,