What You Should Know About Balance Transfer

balance transfer

If you have too much debt on your high-interest credit card, balance transfer is a way for you to save yourself. Balance transfer is all about transferring your own debt to a new card that can lead to low interest rates, helping you save money and get rid of your debt. Eastwest credit card application for balance transfer is an example of premium balance transfer offers.

If you are thinking about choosing balance transfer, then here are the factors that you definitely have to consider. Enjoy reading them:

Transferring doesn’t mean you are repaying

When you use a balance transfer card, you are, in essence, paying off credit card “A” with new credit card “B.” You are only lowering your interest fees.

How much does it cost?

Banks and credit card companies often charge an extra fee for balance transfers. These fees usually depend on the size of the transfer and may also vary according to the length of the introductory period. Be sure to check the fee and take this into account when calculating potential savings before agreeing to each term that you are under.

What are the things that I should look for?

Interest rates – Of course you have to watch out for how much your interest rate will cost after the transfer.

Transfer limits – Each bank limits an amount that can be transferred in each transaction, so basically there’s a chance that the whole amount won’t be able to be transferred properly.

Extra benefits – Your bank may offer you extra benefits in the duration of the process, Make sure that you need these benefits before you say yes to them.

Should I purchase during the transfer?

It will be better if you won’t purchase anything during the balance transfer. It can only affect your credit score and can be charged in your account in the end.

What about the debts?

There can be a chance that you also transfer your debt through the balance transfer. t’s not just balances from other credit cards that can be transferred. You may be able to move loans for cars, appliances, furniture and other monthly installment payments to a no-interest balance transfer credit card, using checks from the bank that issues the credit card.

Can I do this again?

Yes but it can get dangerous. You may think applying for a new balance transfer card when your teaser rate expires is the perfect solution to avoid ever paying interest on your credit card debt. Moves like that can damage your overall credit score. When you continue to open new low-interest accounts, but maintain high debt levels, lenders may see you as a risk, which will make it hard for you to borrow money for big-ticket items such as a home or car.

But in the end, paying off your debt still the best way to rise from the damage that you have done to your credit card. Pay off in minimum, ask your bank for negotiation. Running away from your problems won’t be able to solve anything, in the end.

photo credit: Water Play via photopin (license)

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