Things You Need to Check Before Going for Balance Transfer

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 » Things You Need to Check Before Going for Balance Transfer

Things You Need to Check Before Going for Balance Transfer

By
Add to Favorites:
Balance transfers are offered by many credit card companies to attract new customers and to win over the users of other competitors` cards. For the same reason, balance transfers usually come with a lot of benefits which could prove helpful if used properly and judiciously. However, one should keep a few things in mind before going for a balance transfer. Balance transfers are not necessarily good for your credit score. True, that balance transfer provides a good option if you have a massive outstanding balance on your credit card but at the same time transferring your balance from one card to another completely will erase out the history. So you should avoid closing the other credit card account completely, especially if it has a long history. If you have a high outstanding balance, you don`t want to be adding to it through constantly accruing interest. This is why balance transfer really helps. But it is not a judicious idea to go for balance transfers if the other card doesn`t offer at least the same benefits as the older card if not more. It is unwise to take up a credit card for reducing the balance because you need to build a credit history and hence consider the long term benefits of holding to the credit card. One of the long term benefits involves the APR or annual percentage rate of the credit card. If this is high, the credit card is not worth it because you are likely to end up with some outstanding interest and balance even if you miss couple of monthly payments. Hence this rate should be as low as possible. Balance transfer cards usually offer a 0% APR for the initial term period. What you need to check is the duration of this initial period. This period fluctuates based on the credit rating of the individual and hence you must be certain as to what term period you get for your credit history without making any assumptions. The last thing you need is a credit card with higher interest rate and the initial term period less than what you have imagined. This will leave you with an outstanding balance. Generally, if the initial term period is less than 6 months, the credit card is definitely not worth taking, although some companies offer an initial period of 18 months, which should be sufficient time to clear all your dues. The next thing to consider for a balance transfer is whether the new credit card offers 0% APR only on the balance transfers or on all the purchases. Obviously the second case is very helpful and favorable too which is why you should look out for those opportunities before going for a balance transfer. Having no interest for a year on balance transfer or other purchases could be quite a big boost for you to consolidate your expenses, plan the payment and clear your debt sheet before the term period is over. Hence you need to consider all the factors before going for the balance transfers.

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

Related Research:

5 Reasons to Get the Capital One Venture Miles Rewards Card

5 Reasons to Get the Capital One Venture Miles Rewards Card

By Herbert Moore, Posted: January 18, 2017

If you’re looking for a great travel rewards credit card—one that offers unlimited earning opportunities, flexible redemption, and lots of perks—look no further. This card from Capital One has you covered. Continue reading
Credit Card Tips For Holiday Shopping 2016

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading
Credit Cards to Save More on Holiday Shopping

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading