Balance Transfer Credit Card

Would you like to find a way to save more than $1000 to $1400 this year? If you are one of the American households that has $ 8000 or more in credit card debt, your answer could be a balance transfer credit card.

For most credit cards, the minimum payment due each month barely covers the interest. It could take you years to pay off that balance and with payments totaling at least twice the original amount billed. Substituting a higher interest credit card with a lower interest card with a 0% APR introductory offer for the first twelve months makes perfect sense. If you take the time to compare balance transfer credit card offers and figure out a payment strategy, you could significantly lower your credit card debt, interest free.

Many of the balance transfer credit card offers include a transfer fee, either a minimum of $50 up to 3%. You need to take this into consideration when computing your savings.

Of course the best strategy would be with the intention of having the full balance paid off by the end of the introductory period so you could be debt free. But if that is not possible, by paying what the minimum was previously, estimating $125 per month, add an additional $50 to $75 each month, you could still have a good portion of that balance paid down and save yourself over $1000 in a year. If at the end of the 0% introductory period, the new balance transfer credit card offers a lower rate than your present card, you’re still a winner.

Now there are a few things to remember when you’re playing this trading credit card game. If the purpose is to lower your debt, don’t continue to use the old credit card. After a few months you might want to cancel it.

Another thing to think about if you are planning on applying for another balance transfer credit card with a 0% APR introductory period when this card is twelve months old, that each credit inquiry effects your credit score. So try to keep switching credit cards to a minimum.

Applying for a balance transfer credit card can be effective if you have the right plan and stick to it. You can be on your road to be debt free and rather than pay interest to the bank, pay yourself. Think of how much you could accumulate if you were able to put that $125 to $200 each month into an interest bearing account that pays you!

If you have a credit card you’re likely to have debt, but you could save a small fortune on repayments by transferring the outstanding balance on one credit card to another credit card. Credit card balance transfers are an easy option for managing credit. Some people switch their balances from card to card to take advantage of each new offer. This is known as card jumping or rate surfing.

Credit card balance transfer offers can also be used to reduce the interest paid on bank loans or other loans. If the credit limit is high enough, you may even be able to pay off the loans completely. Some credit cards provide credit card cheques for this purpose, but you’ll need to be careful. Some credit card cheques have higher interest rates than the credit card itself, so read the fine print very carefully. Some credit cards also allow you to transfer the balance from store cards. This can be useful after an intensive shopping spree!

Types Of Balance Transfers

There are two main types of credit card balance transfer offer. Many credit card companies offer users the chance to transfer balances for a rate of 0% for a fixed period, such as six or nine months. Once this offer has expired, the interest rate on the transferred balance will revert to the standard variable rate, which is likely to be considerably higher.

The best way to take advantage of 0% balance transfer offers without ending up with higher interest rates is to get a new credit card about a month before the balance transfer offer expires. Then you can transfer the outstanding balance on your old credit card to a new card and continue to save money on credit card repayments. Remember not to apply for too many new cards at once, as this could damage your credit rating.

The second type of balance transfer offer is one that offers a fixed rate on the money transferred for as long as it remains on the credit card. This may be a good option if you’re currently paying interest at a higher rate. These offers tend to offer a rate of around 5% which is considerably lower than standard interest rates. With this type of offer, there’s no need to worry about transferring balances every few months.

Credit Card Purchase Rates

With this type of offer, it’s best to check the rate that applies to purchases. Credit cards that offer a low balance transfer rate often have a higher rate for any spending on the credit card. It is also common to take any payments you make off the lower rate total first, which means you could end up paying quite a bit for spending on the card.

Each type of balance transfer offer has advantages depending on the amount of debt you have, how you spend and how you plan to pay off the credit card balance. Some credit cards and store cards have annual percentage rates that are well over 20%. Shopping around for a balance transfer card could save hundreds.