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Credit Card Balance Transfer.

Credit Card Balance Transfer

How credit card balance transfer works

Transferring a credit card balance aids in lowering the cost of loan taken against it, besides combining the manifold debts and reducing the outgoings. However, one must be careful and endeavor to repay the arrears before the privileged interest rate duration expires.

Transferring a credit card balance literally means transferring the outstanding balances from a high APR credit card to a low APR credit card. A 0% Intro APR credit card is the favored credit card to transfer balances, though many credit card companies have withdrawn all such offers due to the widespread misuse of the same.

Transferring the balance does save huge amounts of money besides saving the situations from getting shoddier. But many people are unaware of the correct procedure to carry out the transfer.

Changing over the debt to a card with a lesser interest rate facilitates:

  • paying lower interest on the current debts
  • merging multiple monthly dues into one

Disadvantages of credit card balance transfer:

Hidden Fees:

There is normally a transfer fee, usually 3% of the transfer amount which is invisible to the card holder. Hence one should be wary about and avoid the cards that levy a membership/annual fee.

Transfer versus purchase rates: New purchases may qualify for 0% APR on balance transfers. Currently, many banks offer 0% APR on new purchases too and hence watch out for best deal.

Tricky payments:

Initially, payments are regularly applied to the transferred balance since it has lesser rates. The balance transfer must be settled prior to applying payments of new purchases. For instance, if $6,000 is transferred and charged $60, all payments will go towards the $6,000 till it is paid. Meanwhile, the $60 accrues interest since most balance transfer cards do not enjoy grace period for fresh subscriptions.




Many online credit card companies display credit card contrasts. It is better to look for the credit cards taking their facilities and settle on a maximum savings offered credit card. It is vital to observe that a person’s credit history is the criteria for transferring balance APRs. Credit card in offering the lowest rates is invariably meant for people with the best credit ratings. There are variable balance transfer APRs for those with lesser credit ratings and hence, it is wise to choose the credit card offering the lowest APR besides fee for balance transfer for one’s credit ratings.

A balance transfer does not imply that the obligation for settling outstanding balances with the current credit card company is closed. Rather the credit card company should be paid the entire monthly dues. One way to save money is to just send the lowest monthly bills to the current credit card issuer and avoid paying penalty.

The next step is to subscribe to the credit card and submit balance transfer application for transferring the balances.







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