The Benefits of Transferring Credit Card Balances

Transferring credit card balances is a common technique that many people use to handle high interest rates. While the method can be beneficial, it is not without its risk. Any time you can eliminate a high interest rate, it is usually to your advantage to do so. A balance transfer is a very simple process. When you open a new credit card account, they will usually ask you if you want to transfer any balances immediately. Some of them will give you a few blank checks to fill out and use if you would like. You simply write the check for the entire balance and then send it to your credit card provider. Your new credit card will then pay off your old card and your balance will be on the new card. Consider these benefits that a balance transfer will offer you.

No Interest

Credit card interest is typically very high on a normal account. Some companies will charge you as much as 25% APR. If you have any hope of paying off your balances within a reasonable amount of time, you need to do something about the interest. A credit card balance transfer is one way to take care of the interest problem. When you sign up for many new credit cards, they will offer you an introductory zero percent APR. Sometimes the rate will go as long as 18 months, or more. When you can get free interest on your credit card balance for 18 months, you should definitely take advantage of it. The amount of money you save will be quite substantial. You can make a dent in your debt over the year and a half of free interest.

Lower Payment

When you cut 25% interest off your credit card payment every month, you will have a substantially lower payment. While the minimum balance is not usually that big, it can be large with larger balances. The zero percent APR will work in your favor again to give you a payment that you can handle.

Single Payment

Consolidating your debt onto one card is a lot more convenient and effective. When you are making one payment per month, it will be much easier than paying several different smaller credit cards. Another benefit is that you can focus on eliminating the debt easier. When you have all of your debt in one central location, it is much easier to focus on the debt. When your debt is in three or four different places, it is sometimes difficult to get your head around the entire picture. You feel overwhelmed because you really do not know where to start. When you get your debt onto one card, you can put all of your efforts into paying it off. There is never an issue of knowing which card to make payments on.

Multiple Transfers

If you do it right, you can transfer balances a few times. If you have not opened accounts with all the credit card companies yet, you can give each one a turn until your balance is paid off. There is nothing that says you cannot transfer to zero percent interest cards more than once.

Improve Your Credit Score - Free Consultation