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How to choose a balance transfer credit card
There are different types of balance transfer credit cards. How can I find which one is good for me? A balanced transmission can save your money if you have high-interest rate credit card debt. Once you find a decent balance transfer card, you can transfer your current debt to a new card. This charges a much lesser interest rate. You can repay debt faster at the lowest rate, save money, and get rid of a debt at a much faster rate. However, not all balance transmission credit cards are good credit cards that can diminish the debt facility.
What is the Balance Transfer credit card?
When performing a balance transfer or transfer the existing debt to a new credit card, this credit card charges 0% for a certain period. Balance transfer credit cards usually offer a 0% APR for 12, 15 or 18-month period. The purpose is to pay the debt before the end of the period, without accruing interest. That generally means avoiding extra purchases with the card in the meantime.
Some balance transmission cards offer benefits such as cashback on buying, access to free credit score checking, and mobile phone insurance to cover robbery and damage if you pay with the card. Also, within a few months after opening an account, you can use a certain amount to find a card that offers a sign-up bonus. However, benefits such as sign-up bonuses are not always worth the potential growth of the balance, as the balance transfer card, are best used to pay off debt and do not accumulate any more.
How to choose the best balance transfer credit card
You want to make sure you find the right card for you. Here are a few tips to help you to choose a balance transfer that makes sense for you. Keep these important things in mind when choosing a card.
The introductory balance transfer rate and period
Many balance transfer credit cards have low overview rates or zero percent for balance transfers. The introductory interest rate reduces or eliminates the monthly financial costs of a balance transfer over a period of time. The absence of financial fees makes it easier to pay your credit card balance. 0% is ideal, but low rates, such as 2.99%, are also suitable.
Normal balance transfer APR
At the end of the implementation period, you will pay interest at the normal balance transfer rate (which may be the same as the purchase rate). This is especially true if you do not want to pay high-interest rates after the end of the promotion period, especially if the promotion period is not long enough to pay the full balance transfer.
Transfer APR of acquisition with credit card
Many credit cards proposal the same preliminary rate for consumptions and balance transmissions, making the offer even more beneficial. However, the purchase rate for beginners may be against you. If the card has been charged due to a promotional charge, we do not make an effort to remit the balance.
Balance transfer fee
The balance payment fee is naturally 3% to 5% of the balance to be submitted, or a minimum of $ 5. The more money you spend, the higher the commission. It is important to note that the balance transfer fee does not invalidate the interest savings you receive by transferring your balance. If you find a credit card that does not charge a balance transfer fee, study intensely.
If you are qualified
Don’t expect it to be approved, as you get an offer at a 0% rate. Credit card issuers send large, unapproved proposals to consumers who meet certain basic criteria. Upon application, the card issuer will further analyze credit history, income, and other factors to determine eligibility. Eventually, you may not be eligible for a low-interest rate balance remittance
Some balance transmission credit cards necessitate you to transmission your balance within a certain period. The promotion fee will be applied after opening the account for 60 days. If, for some reason, you are not ready to transfer your balance immediately, wait for a card application or choose a credit card that does not need to be transferred in advance.
Compare the standard APR of the card
If you still borrow money after the 0% rate expires, you will need to pay interest on the remaining balance. It is essential to know the standard fee to be charged. And a card with a higher standard APR than now is probably not needed unless you are 100% sure to pay the balance before it becomes active.
Even if you have a plan to pay what you owe while still having a 0% rate, things can go wrong. Therefore, it is essential to study interest rates, even if you do not care. If the two cards are alike, and one has a lower standard rate, it makes sense to select it in case the balance leftovers.
Let’s look at some of the benefits of receiving a transfer offer. Transferring your balance to a lower interest rate credit card allows you to further reduce your credit card balance. The majority of monthly payments are used to reduce credit card balance, not interest rates, as interest rates may be lower, and financial costs may be eliminated.
You can pay the full amount before the end of the promotion period. You can transmission your balance to a superior credit card. If your current credit card has bad conditions such as high fees and short grace periods, you can transfer your balance to a better credit card and permanently close your old credit card account. Consolidate credit card debt to reduce monthly credit card payments. Moving multiple credit card balances to one credit card (because of a sufficient credit limit) can save you from having to make multiple payments with multiple credit cards. It is easier to pay your credit card balance than to pay multiple credit cards.
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