Wise Strategies in Transferring Credit Card Balance

By Leni Parrish on August 27, 2009

How can a balance transfer credit card help you manage your debt better? Listed below are wise strategies for transferring credit card balance.
Choose the right card. Not all credit cards that offer a zero interest rate on balance transfers are worth signing up for. You need to be picky before submitting your application. First, make sure that the regular interest rate will still be low enough for you to maintain your account. Second, make sure there are no hidden fees or unfair charges. Third, find a card that gives a sufficient introductory period so you can enjoy the zero interest rate for a longer time.

Check your personal credit rating. Most credit card companies accept only cardholders with good credit history. If you have a low score, submitting an application can be a waste of time. Moreover, the rejection can be damaging on your degrading credit score.

Read the rules. Some balance transfer cards impose penalties for late payments payments. Your issuer may disqualify you from enjoying the zero interest introductory offer with a single late payment. Even worse, the regular rate could be much higher than that of your old credit card.

Transfer high rate balances ONLY. If you have several credit cards with balances on each, find out which ones need to be transferred. If some of your cards offer a lower rate than your balance transfer card, then there’s no need to transfer those charges. Don’t forget to check how much you will be charged for each balance transfer transaction.

Stop spending with your credit card. Surely, this is not the time to use your credit card for new purchases. Refrain from using any of your cards until you manage to pay off your entire credit card balance.

Check the interest rate for purchases. Generally, the zero interest for balance transfers is not applicable for purchases. Most cards do impose more than just one APR. This is why you need to determine the interest rate that applies for new purchases.

Remember that if you’re going to use your balance transfer card in paying for your groceries or bills, you will be charged with the purchase APR. Thus, you should also avoid spending with your new card unless you have to.  Sometimes, you may be required to use your card for purchases to keep your account active. In this case, use it only for smaller purchases and pay your balance right away to avoid paying additional interest.

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