The content is accurate at the time of publication and is subject to change.
If you are looking for ways to erase your debt then balance transfers credit card are blessing in disguise for you. It allows you to transfer the unpaid balance of the present credit card that offers lower Annual Percentage Rate or APR. Annual percentage rate is a combination of low interest rate and less cash charges. It will be even better, if you can find credit cards with 0% APR balance transfers that offer you better money saving options. Balance transfers help you to pay off your debts quickly and thus saving you from paying huge amount of interest.
Benefit of balance transfer
- Balance transfer fees:
Most of the credit cards companies will charge you transfer fees. Usually, the fee is the percentage of the whole transfer amount, which is in the range of 2-3 % of the total debt amount. If you have a balance transfer credit card you will not be required to pay such kind of fee. Whether the fee is waived for a period or forever depends on the type of credit card that you have. At times, in order to waive off the fee, you need to make the balance transfer while filling in the credit card application form. While at other times, you must pay off the entire balance transfer amount by the initial six months, extending up to a year, in order to hold legibility for getting the fee waived off. Interestingly, a few credit cards may not charge the applicable fee on balance transfer, because they enjoy the benefit of receiving succeeding finance charges.
- Finance charges
Another very important benefit is the low interest rate which is charged on such cards. The best deal is when you get 0% APR for life of the balance transfer. This way you need not pay interest on the transferred balance. Further, the rate of interest rate accelerates on other purchases made via the card; however, the balance that has been transferred is free of any interest fee. You must consider the interest rate before choosing a balance transfer credit card. You should also be aware of the terms and conditions that you are required to fulfill in order to be entitled for lower introductory fee.
- Consolidating debt
A balance transfer’s credit card helps you to consolidate your debt. If you have all your debts under single card, paying it off becomes convenient, and also allows you to keep a track on your purchases and pay off accordingly.
Besides helping you bat out of a problematic financial situation, balance transfer can earn you money today. What? Sound’s unbelievable! It’s surprising but true; a few credit card companies are offering cash back rewards for processing the balance transfer, and have even stopped charging the fee applicable to do transfer balance to the new card.
It is important that you should learn from your mistakes and balance transfer is a good opportunity to know your fault. It’s a perfect way to know when to put a halt at your purchasing, and devise a plan to repay your loan