How to use balance transfers to get out of credit card debt

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 » How to use balance transfers to get out of credit card debt

How to use balance transfers to get out of credit card debt

By
Add to Favorites:
The balance transfer option is a very good move to go for if you are neck deep in credit card debt. You might feel there is no escape for you from the predicament that you have put yourself into, but there is no need to panic. Panicking is not going to serve any purpose other than making you disoriented and unable to take any decisions. There are a number of ways to get out of credit card debt and back to a normal life. We shall discuss one such a way of getting rid of credit card debt. Balance transfer is a practice of transferring an outstanding balance from an old credit account onto a new credit account in order to buy more time to make a payment. It can also be done in order to reduce the interest amount that is being paid on a certain principle amount. In order to make a balance transfer successful, there are a number of things to keep in mind. Firstly, the interest rate on the new credit account must be lesser than that of the old credit account. Only then will it be financially beneficial for you to make the transfer. But in certain cases, the only reason that the balance transfer is being done would be to buy more time to make the payment. In such cases, it does not really matter how much the interest rate is on the new credit account as long as it gives you an interest free period during which you will not need to make any payments at all. But do be aware that when the interest free period expires, you will still have to make the payments that you owe the bank. Another thing to keep in mind is that you must not use the new credit account as soon as you open it. You will be tempted to do so given the fact that there might be a lot of rewards and other offers being made by the bank since it is a new account. But again, you need to realize that you will first have to clear your outstanding balance before you go ahead with any new purchases. Never live your life on debt. Try to pay off all your debts as soon as possible so as to be financially free. And make sure that you do not close the old credit account. By doing so, you will increase your debt to credit ratio. This ratio will directly affect your credit score. Hence it is important to make sure that you have many credit accounts open but at the same time do not use those accounts to borrow in order to make purchases. Living life on borrowed money will always lead to complications. Live within your means and pay off all your debts in time. a credit card must be used as a convenience and not a necessity, it is only when you fall into the latter category that you will end up in debt.

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

Related Research:

Dashlane: Password Management and Shopping Ease in One Simple Product

Dashlane: Password Management and Shopping Ease in One Simple Product

By Angela Rose, Posted: May 3, 2017

Are you terrible at remembering passwords? Are you so terrible, in fact, that you often use the same one for multiple websites? If so, you’re not alone. Continue reading
SoFi Making Lending Social

SoFi Making Lending Social

By Dar Dowling, Posted: April 26, 2017

Since 2011 SoFi, a San Francisco based online lending company, took the lending industry by storm, when they became the first online lender giving people access to affordable student loan refinancing. Continue reading
Affirm: A ‘Friendly’ Credit Alternative

Affirm: A ‘Friendly’ Credit Alternative

By Angela Rose, Posted: April 5, 2017

In 1789, Benjamin Franklin wrote, "In this world nothing can be said to be certain, except death and taxes." His statement holds true even today - especially when it comes to personal finance tools such as credit cards. Continue reading