Habits to use balance transfers for your benefit

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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


Updated: September 28, 2018

The content is accurate at the time of publication and is subject to change.

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.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!