Credit Card Transfers Allow You To Move The Balance Of One Credit Card To Another

Category: Finance, Credit.

Credit card transfers allow you to move the balance of one credit card to another.

But you have to use them correctly to avoid digging yourself into a financial hole. By doing this, you can save money and help to pay down debt faster. You will see more benefits by making the move in specific situations, but not every situation will warrant the use of a credit card transfer. Using Them When Rates Are Lower. If you do qualify for this type of offer, you should consider ALL of the determining factors in how you can best utilize them to save money. One obvious time to consider using balance transfers credit cards is when the interest rate on your current lines of credit are higher than the ones you will pay on the new credit card.

This is particularly beneficial when the interest rate is an introductory 0 interest offer. It makes sense to consider this type of move for any situation in which rates are higher on your existing card balances. In some situations, lenders will offer six months or even more as an introductory 0 APR period in which balance transfers do not incur finance charges. Consolidating Balances. During this time, moving your balance will help you to pay it down faster and without any additional finance charges accruing all the while. Another reason to consider using balance transfers credit cards is when you need to consolidate several high interest card balances. Doing this will allow you to pay down your debt more aggressively each month without having to swim through the head wind of significant finance charges piling on your obligation.

If you have a larger credit line on the balance transfer credit card, consolidation of several lines of credit, assuming the interest rates are the same or lower on them, will undoubtedly help you save money, and in some cases, that savings can be significant. Having only one payment to make is nice too, helping to make monthly bill payment a much easier process. There are some situations in which credit card transfers may not be beneficial and even outright detrimental to your financial well- being. When Not To Use Them. For example, if you are working on paying down a big chunk of debt, it might seem counter intuitive to be opening yet another line of credit. Opening another credit line is not necessarily perilous, but making the mistake of not paying off the balance within the time frame of the introductory period can very well be.

But the thought of a 0 APR introductory rate for 6 months is just so tempting. Some card issuers will even retroactively charge you an exorbitant interest rate on the balance that you carried over the introductory period, if the balance is not paid down entirely. In those instances, accidentally missing a payment or not paying down the balance can be outrageously expensive. Most card issuers will merely charge you a higher APR on the remaining balance, but be absolutely sure that you know what the terms and conditions are for the balance" pay down" before applying. So, buyers beware! In many cases, the right credit card transfers can save you money and help you to simplify your life. When using any type of balance transfers credit cards, make the smart move for your situation.

With some excellent offers available currently from card issuers, it makes sense to work towards using these options especially when there is no fee or nominal fee charges for making transfers. Yet, each situation should be considered carefully and individually.