Balance transfers may end up being costly, if they are not done right or done with expensive credit cards. Below are a number of factors to consider when looking into transferring or consolidating your credit card balances into one or more cards.
The Introductory Rate
The introductory Interest rate may decrease or eliminate monthly fund fees in your balance transfer for a certain length of time. Eliminating finance fees may make it feasible for you to pay back your credit card balance in a shorter amount of time and at a monthly re-payment schedule that makes more sense for you financially. A 0% interest rate is perfect, but a very low interest rate – like 2.99 percent – is great also.
The Amount of credit card debt you have is a significant consideration for two reasons. To begin with, you might or might not qualify for enough charge on a balance transfer card to pay all your current credit card debt. This may mean you will need to apply for a number of offers if you would like to move all the debt to a 0% card.
Second, your monthly minimum payment could be higher than what you’re spending now. You will want to be certain that you know what the minimum payment will be and your budget can handle it.
The Introductory Period
Once the introductory period expires, you will be paying attention in the regular balance transfer speed (which is sometimes exactly like the buys speed). You do not want to end up paying a high-interest rate after the promotional period ends, particularly if the promotional period is not long enough for you to repay the complete balance transfer.
Many credit cards offer the identical introductory rate for your purchases and balance transfers, making the offer more attractive. However, an introductory purchases speed may work against you. If you are racking up charges on the card since there’s a promotional rate, you are working against any attempts toward paying off the balance transfer.
The Balance Transfer Fee
Balance transfer The bigger the balance transferred, the greater the fee will be. What is significant is that the balance transfer fee does not negate the interest savings you are getting by shifting your balance. If you discover a credit card that does not charge a balance transfer fee, consider it strongly.
Your Credit Score
Credit Card issuers do not publish their underwriting criteria. It is generally known, however, the best card offers require a good credit rating. While there’s no minimum score required, in my experience that you wish to target for a FICO score of 700.
If you don’t understand your credit rating, there are lots of free tools available to get access to your score. Among the free choices is credit card issuers. You’ll get a list of these issuers here.
Whether You Qualify
Don’t assume that because you get an offer to get a 0% rate which you will be approved. Credit card issuers send out bulk pre-approval offers to customers who meet certain basic criteria. There’s a possibility that you can not ultimately qualify for the low rate of interest balance transfer.
Some If, for some reason, you are not prepared to transfer your balance straight away, you need to wait to apply for the card or choose a credit card that does not ask that you make the transfer upfront.
Credit Card issuers don’t enable you to transfer debt from one of their cards into another. For those who have debt on a Citibank card, you cannot move it to another Citibank card. This is very important to keep in mind when looking for balance transfer cards. You may find a terrific deal, but it will not do you much good if it’s with the same issuer which now holds your debt.