If you have a debt with a high interest in form of creditcard, you may consider to transfer creditcard balance. Because it can save youmoney in financial terms and may help youto pay off your debt more quickly.
But what does it take to move a balance from one card toanother? Here we will discuss that with the following process.
1. What is Balance Transfer
Balance transfers are oneof some nice options to save your money on interest costs. However, this debtpayment technique is not often discussed in a few quirks. Be sure youunderstand it deeply and are well-off with it before you move on.
- The transfer of a balance often involves a feeof 3% of the total amount you move to the new card. Be sure to consider thiselement in determining whether a balance transfer is right for you.
- Your new card’s interest-free period will notlast forever. Most of the time a typicalcard offers 0% for a maximum of 6-15 months.
- Afterward,the APR period of 0% will finish, you will have to pay interest on your remainingbalance, so you must know the current APR of your debt and compare it withfuture rates.
- If ever during your 0% APR term you miss apayment, your deal will probably be canceledand you will have to pay interest immediately from now onwards.
- Most balance transfers options are onlyavailable with good credit. If your scoreis below average, you may be better off transferring your debt to a low APRcard.
2. How to apply for a balance transfer credit card
It is now time to find and apply for the card to which youwill transfer your balance. There are many offers on the go, so we have runover the best balance transfer offers to simplify that task.
When comparing cards, pay special attention to the length ofthe APR period of 0% percent and secondly balance transfer fee. Ideally, thebest card to select must have a low fee (or maybe none) and a long APRpromotion at 0% rate.
Furthermore, find out how much you will have to pay everymonth to finish your total debt before 0% period ends. This means that you cansqueeze the most out of the balance transfer. If payments cost with one card isgoing too high, then look for another with 0% APR period more than 1st option.
After you select the best option, apply for it by using an online application form and wait for the response.
3. Collecting information & documents
Once you are successful to get your 0% APR card, then itstime to collect the necessary documents and information to initiate balancetransfer. In particular, you will need your personal account details for thecard from which you want to move your debt and the exact amount which totransfer.
4. Time to make the call
Stay tight and make a call to customer service phone numberof 0% APR card. Connect with a liveperson and then explain him/her that you want a Balance Transfer on your newcard. Give him/her the required information which you have collected.
Finally, your part is done – now they will contact your oldcredit card company and transfer your balance to your new card. Be patient, theprocess may take a week or two to complete.
5. Plan-up to pay off your debt
It is time to celebrate to escape the stranglehold of high-interest rates. Plan your things upcarefully so that you can quickly pay offyour balance. Moreover, budgetingtechniques can help you out to avoid any future debt.
- Create abudget – Make an expenditure planthat can cater 0% debt payment. Now strictlyfollow it.
- Free-upsome cash – You must calculate the amount you have to pay to your 0% APRcard every month. Furthermore, you must plan to get rid of the balance beforeinterest begins to accrue. But consider that your ‘minimum’ payment calculation– as you make more payment it will free your debt more quickly. Cut-upunnecessary expenses to save extra cash can also be a good strategy.
- Trackyour expenses – Making a budget can be the best way to keep up with your expenses, this will make surethat you don’t let a dollar untracked.
- Don’t stopbudgeting – Even after you have paid-off your 0% card balance, you don’t haveto stop your budgeting. Keep tracking your expenses so that you can avoidfuture situations.