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Credit cards are many and credit card firms always compete to bring out newer offers and deals to attract clients. balance transfers are offered by credit card companies to attract new customers. By offering lower interest rates, interest free months in the beginning or other incentives they make their company appear better. It is important to clarify with the new company all the details, and be sure that you are not jumping from the frying pan into the fire. Often these deals are short lived and the customer ends up with higher interest rates after the promotional period.
Once the customer decides to go for a balance transfer, the company may charge a small fee for balance transfer or it may be done through automated services. It is a quick process and the lower interest rate is for a limited period, therefore the main aim should be to bring down the balance on the card by paying up rather than charging more transactions to the card. The balance transfer can also affect the credit limit on the new card.
Many people use attractive teaser deals on credit cards and keep transferring in a bid to achieve lower interest rates. However it is not a recommended strategy. There may be a clause which does not allow people to do the transfer a second time once the promotional period is over and the customer is now stuck with higher interest rates.
There are also occasions when balance transfer may take time. It could take 3-4 business days and in such an instance, the client must be careful not to miss out on the due date of their card and thus end up being a defaulter. This would negatively affect their credit report and credit scores making it difficult to avail of loans should a need arise.
When making a balance transfer be sure that you have investigated all options available in the market so as to not be fooled by the credit card companies. Make sure that you do so with a credit card company that offers the best deal, a balance transfer free of cost and with low or no interest on the new card you can easily pay off the amount owed with a new time frame to complete it in.
These balance transfers can be made use of by employed salaried individuals. There are however conditions on the age of eligibility as well as based on the income earned. These particulars vary according to the credit card company so do a thorough research and ensure that you pick the one that works best for you.
There is complete and pertinent documentation necessary for the process much like when applying for a mortgage. Choose the firm and submit proof of employment, income and address. Get the letters sanctioning the transfer to your new account. The documents for the closure of the old account must also be in place. The last step is signing the checks and submitting them to the agency to set the process in motion.