4 Steps to Transfering a Balance

Credit card balance transfers might be a helpful strategy for those who are having difficulty paying off their credit card debt. Because of attractive introductory APR rates, a balance transfer credit card might help you pay off debt without interest.

Considering a debt transfer? There are a few things you need to know, such as how much interest you’ll pay on your existing card and how to choose the best balance transfer credit card.

How Do I Transfer Money Between My Bank Account and Another One?

To put it simply, a balance transfer is the act of transferring existing credit card debt from one account to another. In order to cut their interest rate, those who have racked up credit card debt on cards with higher APRs might take advantage of balance transfer offers.

Many credit card issuers provide promotional periods with no interest on debt transfers as a way to entice customers to make the switch. The average length of an introductory APR deal is six to 18 months, however some might extend up to two years. Some credit cards provide additional benefits such as waived balance transfer costs, which are normally 3% to 5% of the transferred amount.

With a balance transfer, customers may move their old credit card debt to a new card and spread out their repayments over a longer period of time without incurring monthly interest charges.

How to Transfer Money Between Bank Accounts

Transferring balances isn’t difficult, but there are a few measures you should follow to ensure a smooth process. A balance transfer may be done in four easy steps.

1. Do Your Homework

Make a list of all of your existing credit cards and their associated balances before ever considering a balance transfer card. The interest rate on your present card should also be noted in order to determine whether or not having a balance transfer card is cost-effective for you.

2. Obtain a Credit Card for Balance Transfers

To get the ideal balance transfer card for your situation, you need to know where you stand. As soon as you locate a credit card with a favourable interest rate for debt transfers, be sure to apply.

3. Transfer Your Balance to the New Card You’ve Just Created

You may begin transferring existing card balances as soon as your application for a balance transfer card has been granted. Check with your card issuer to find out how to transfer funds from one card to another.

When transferring funds across credit cards, you’ll need the account numbers, name and address of the card issuer, and the total amount being transferred. The transfer might take up to 14 days. Pay your monthly credit card payment until the balance transfer is completed and the amount is transferred to the new card.

The original card will offer a credit if you transfer too much since you had to make a payment while you waited for the balance transfer to go through.

There is a flip side to the coin. The previous card may still have a balance if you continue to use it or if fees and interest are added to the amount after you requested the transfer.

4. Make a Payment on Your New Credit Card

Make a concerted effort to pay off your card amount before the promotional period expires after the transfer. You need to figure out how much money you need to put down on your credit card to pay it off on time. You don’t even have to utilise the full intro time. Paying an additional fee each month can help you pay off your credit card faster.

Adding additional purchases to your credit card might prolong the process of paying it off. You may also have to pay interest on new purchases that fall outside of the introductory APR rate.

Performing a Balance Transfer: Advantages and Drawbacks

While a lifesaver for some who are drowning in credit card debt, balance transfers are far from flawless. Here are some of the advantages and disadvantages of transferring your credit card debt.

Pros

  • There is a way to save on interest costs
  • Credit card debt may be consolidated.
  • Reward points may be earned while using certain balance transfer credit cards.

Cons

  • Charges for transferring balances from certain credit cards are too high.
  • There is no guarantee that balance transfers will save you money.
  • Paying off the credit card debt before the initial low-rate period expires requires self-control.

A Balance Transfer Credit Card Should Have the Following Features:

However, not all balance transfer credit cards are made equal. When looking for a balance transfer card, keep these things in mind.

Introductory offer length: As a rule, balance transfer cards give at least six months of 0% APR, but some offer as much as 24 months.

Balance transfer fees: There are several factors that decide whether or not a balance transfer is worthwhile. When it comes to significant balances, the difference between paying no fees, paying 3 percent fees, and paying 5 percent fees might be substantial.

Ongoing interest rate: If you carry an amount over from month to month, you’ll have to pay interest again when the introductory period finishes. Don’t overlook the current APR rate when comparing other card benefits.

Credit requirements: To be eligible for a debt transfer credit card, you must meet certain credit standards, just as with any other kind of credit card. Before applying for a new credit card, check your credit score to see which cards make sense for you.

Best Credit Cards for Transferring Balances

It’s not uncommon for the finest debt transfer credit cards to provide prolonged interest-free periods and a slew of additional card features. A look at the best balance transfer credit cards currently on the market is provided in this article.

“Dimensions Preferred” credit card from Citibank

No-fee Citi credit cardholders get a 0% introductory APR on debt transfers and new purchases for the first 18 months of the card’s term. Depending on your creditworthiness, the variable APR ranges from 14.74 percent to 24.74 percent after the intro period.

Citi® Double Cash Card

Another Citi credit card providing a lengthy intro APR deal is the Citi Double Cash Card. The card comes with an initial 0 percent APR for 18 months on balance transfers. Your creditworthiness determines the subsequent 13.99% – 23.99% ongoing variable APR.

You may also earn up to 2 percent cash back on all purchases with this no-fee card — 1 percent cash back when you make purchases and another 1 percent cash back when you pay them off.

Discover it® Cash Rewards Credit Card –

Another good balance transfer card, Discover it Cash Back offers with 0 percent initial APR for 14 months on balance transfers and purchases. After the intro period finishes, the continuous variable APR is 11.99 percent to 22.99 percent , dependent on your creditworthiness.

A 0% annual fee is also a perk of the card, which offers 5% cash back in rotating spending areas each quarter. Then at the conclusion of the first year, Discover will match your cash back earnings to the fullest extent.

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