Habits to use balance transfers for your benefit

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » Habits to use balance transfers for your benefit

Habits to use balance transfers for your benefit

Add to Favorites:

Balance transfer credit cards are offered by companies to attract customers of other cards. Almost every balance transfer card comes with several incentives including milestone bonuses and 0% interest rate introductory offers. However, one needs to be careful while going for balance transfer from one credit card to another credit card. Here are some things that you must consider with balance transfer transactions.

Take note of the costs involved

Balance transfer cards often come with several costs. One must have to get their calculations correct. Otherwise a balance transfer credit card might prove to be an expensive mistake. Before going for balance transfers it is also ideal to look for the possible costs through which one could lose the advantage offered by 0% introductory rate during the promotional period. These costs include balance transfer fee, annual fee, high interest rates after the introductory period and also excessive penalties including late fee and overdraft fee. All these costs could negate the benefits of a balance transfer transaction. So, one must take a calculated risk and ensure that it doesn’t backfire.

Make sure the old credit card account isn’t closed

If you close the older credit card, you will adversely affect your credit rating. Also it will cause a dip in the available credit limit, which increases the credit utilisation ratio, especially when the new credit card offers a lower credit limit. Therefore it is advisable to keep the older credit account open.

Ensure you pay off the debt early

It is a standard practice that balance transfer credit cards offer lower or 0% introductory rate in the beginning but the APR climbs steeply once the introductory period is over. Therefore one must ensure that they pay off the outstanding debt as soon as possible. A good way to do so is to keep apart a minimum amount to pay back every month, such that the balance is paid off completely before the end of the introductory period. If it isn’t repaid before the introductory period is over, one has to pay higher interests which will once again bring an added burden.

Don’t shop to avail rewards

A lot of balance transfer credit cards have offered milestone bonuses during holiday season. For example, there are cards which have given $100 discount if the customer spends in excess of $600 or so, in the first 3 months. Customers should be careful of such strategies and not go for a spending spree to avail the discount.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

Posted: June 21, 2017

Whether you are married or not, we all agree that marriage is incredibly important for a person. It signifies the beginning of two people as a team, as a family, of a long commitment. It is a newly born union and the sign of your choice, ... Continue reading
How To Choose The Best Credit Card For Everyday Spending

How To Choose The Best Credit Card For Everyday Spending

Posted: June 21, 2017

When you reach for your wallet to pay for groceries, gas, dinner out, or any other everyday purchase, are you searching for cash, a debit card, or a credit card? Many people hesitate to charge this type of everyday spending to a credit ... Continue reading
How to Save Money. Best Credit Card Deals and Tips.

How to Save Money. Best Credit Card Deals and Tips.

Posted: June 20, 2017

We all've been through or may find ourselves in such an emergency when money is needed immediately. Lucky you are if you have savings for unexpected expenses. If not, it's never too late to start saving money. There are different ways to ... Continue reading