Balance Transfer Credit Card
What exactly is “Balance Transfer” on a credit card?
If that vacation went over-budget and your credit card company is charging 15% interest – you have an option.
That’s a credit card with a low introductory interest rate that you can transfer your debt to. Doing that, and staying on a budget, will save you hundreds of dollars in interest payments.
You still have to pay the debt. however. You are just paying the credit card debt at a lower rate of interest. That will mean your money will lower the amount you owe on the debt by more than a credit card with a high interest rate.
Read the FINE PRINT!
- Look at the balance transfer fee.
- Pay off as much as possible while the low – or no – interest time frame is in effect.
- Don’t cancel your old credit card since this could hurt your credit rating.
- Pay on time.
- Stop using the old credit card.
And remember, balance transfers aren’t for everyone…as always, those with pristine credit do best.
“Balance transfer offers usually include stipulations that enable the credit card company to refuse balance transfers if your credit score or income level decline after you accept the card offer. Transfers can also take a while to complete and you could miss a payment date on your current card while you are waiting for the new card issuer to roll over the balance. Late payments cost you money in terms of fees and hurt your credit score. You can contest a late payment with the old card company, but ultimately, you are responsible for making sure that payments are made on time.”
But we saw that coming!