Consumers Struggling With Cash Flow Should Consider A Credit Card Balance Transfer

Many people have paid off their credit card debts faster by transferring them to a new credit card with lower balance transfer fee and APR interest rate. Many balance transfer cards are offering zero percentage APR and balance transfer for a limited introductory period. It will be worthwhile to apply for the balance transfer card if you have the means to pay off the balance you transfer within the introductory period. It will lighten your debt burden because you won’t be paying for the high interest fees that are charged by your original card. The typical introductory period offered by a balance transfer card ranges 3 months to 15 months.

How to Determine If It Makes Sense for Transfer a Credit Card Balance with a New Company

The length of the introductory period is not the only thing you should consider but you are to also check if there is any other fees. For example, you may be charged with a balance transfer fee even though there is no interest charges during the introductory period. The balance transfer fee is a charge you have to pay as soon as you have transferred your balance to the new card. The balance transfer fee is normally 3%. The balance transfer fee can reduce the amount of money you are saving when paying your credit card debt. For example, if you transfer $5,000 to a new card with 0% APR during the introductory period and 3% balance transfer fee, you have to pay $150 in fees when the transfer is completed.

Cards that don’t charge balance transfer fee usually come with a requirement to transfer the balance within a certain period. The promotional period for qualifying for zero balance transfer fee is about 60 days to 90 days after the account opening. Another common fee that is charged is the annual fee which is pay once every year. If possible, you should find a card with long introductory period of up to 12 months – 15 months, no balance fee and no annual fee. Long introductory period gives you enough time to pay off your balance so that you don’t have to struggle to pay the bill every month.

To find out whether it makes sense to apply for the balance transfer card, you have to take into account factors such as the amount of your debt and how much time you think you will need to take to pay off the entire balance. After you get approved for the card, you must be discipline and stick to your commitment to pay the bill on time. There is no need to terminate the old card because it can cause your credit score to drop. But, you must also not charge your old card again for new purchases as it will vindicate the benefits you get from making the balance transfer. Being disciplined to pay your bill on time will prevent you from losing the 0% deal.

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