4 Easy Steps To Transfer a Credit Card Balance

It is usually a good way to reduce the amount of money you pay back on your existing debt by transferring a high interest credit card balance to one with a better interest rate and/or better overall terms and features.

You may also be able to benefit from a rewards program or it might be possible that you may gain other features you didn’t already have but this depends on the “better” credit card you select.

balance transfer

These features might include travel accident insurance coverage or an extended warranty program for new purchases that you made with the card. Sometimes you may encounter such situations when at first glance balance transfer does not look the great deal, so before moving your accounts around, it’s important to do your research.

If you have decided to take advantage of a balance transfer offer, then here we are presenting you a guide for a smooth transition from one card to the other, so use it to avoid costly or time consuming mistakes:

Step One: Search a better credit card with a balance transfer offer

Unless you are going to have any benefit from the balance transfer in some way, there is no point moving money from one credit card to another. The introductory rates and promotional offers sometimes becomes the reason due to which people are misguided. So in order to avoid this it is important that you go in depth of the details of such offers to see what sort of rates the company will charge from you once the promotional period ends.

When you are searching for possible cards to replace your existing credit card, you should make sure that you find out the following information so that you are able to make an accurate comparison between your existing card and the new card:

  • What is the introductory rate offered by the company and when does it end?
  • Does the introductory rate offered by the company apply to new purchases only?
  • Does the introductory rate offered by the company apply to balance transfers?
  • What is the APR (annual percentage rate) of card once the introductory offer is ended?
  • Does the company charging any annual fee?
  • How much is the annual fee?

credit-card-visa

One of the most important things that you should take into consideration when looking at a card to move your existing balances is that you should know that what does the card charge for a balance transfer fee? A 3-4% fee is being charged by many cards for transferring balances. If you’ve got with you a balance of $4,000 on your card that you’re moving to a new card, then the card company would be charging a fee between $120 and $160 just to move the balance. If you’re going to pay a balance transfer fee, then you may need to save a whole lot of money in interest over the life of the balance on the new card so that you may make that fee worth it.

Step Two: What are your chances of getting your new card request approved?

You will not get the approval for the credit card, just because a credit card offers a 0% or 2% interest rate on balance transfers. Usually cards always put their best foot forward; but sometimes people get the approval for the cards under different terms, it may be based on their credit scores and payment histories.

Take a close look at the cards terms and conditions; because it often happens that while reading the terms and conditions of the credit card that you have applied for you will come to know that if you don’t qualify for the terms of the offer they will issue you a credit card with higher interest rates or different overall terms. If this happens, you should have to think that will the higher rates be beneficial to you? Or will you just end up with a second credit card that charges a fortune in fees and interest and the will to spend more because now you have a new credit line available?

Step Three: Apply for the Credit Card

If you have been successful in finding a card with a great offer that you’ve compared closely to your existing card and you now feel that you will be able to save money through the new, lower interest rate and/or through the rewards program the new card offers and that you’ve considered all your possible chances of being approved for that card and it all seems that you are ready to go; then this is the right time to apply.

While you are applying for the new card, you should make it sure that you have filled out the balance transfer portion at the time of application. The reason behind this is that sometimes the balance transfer offers are only good for immediate balance transfers that occur at the time of account opening. Those balance transfers that are occurred later might be considered a cash advance and they may not come with the same promotional terms that are your initial transfers comes with.

Step Four: Stop Using Your Old Credit Card

Now after that you’ve transferred the balance to a new and improved credit card, you should stop using your old credit card. You should either cut it up or put it away so you aren’t tempted to charge on it. If you have transferred the balance and then still continue to use your old card, you’ve completely defeated the purpose of moving the money and now you have to pay off two credit cards!

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