What Is Balance Transfer In Credit Cards
A balance transfer credit card is a good way of consolidating your current debts into one simple, monthly payment.
Balance transfers can be an effective tool to help you pay off what may seem like insurmountable debt and get back on track.
It's important to keep in mind that while this option can save you on interest payments, it does usually come with a small fee.
what are balance transfer cards?
A balance transfer card can save people that are struggling financially quite a bit money .
The trick here isn't what you'll have to pay in annual fees, what it comes down to is what you spend on your balance transfer card .
If you're transferring balances from one high-interest credit card that has a set interest rate of 28% onto another high-interest credit card that has a 14% interest rate, what this can mean for what you owe each month is substantial.
For example, if what you're paying to the regular credit card is $500 while what you're paying each month toward your second credit card with only an introductory 3% APR offer will cost about $429 … what's the difference?
What are balance transfers?
Balance transfers aren't actually shifting what you owe from one place to another, but it does affect what monthly payment is required of you as well what the money goes toward what the debt itself is rather than just trying to pay off any interest fees.
What can happen to your credit score? When someone applies for a new loan (even if it's just a store credit card), this can impact what they make qualify for — and that includes what their interest rates will be as well what their approval chances are.
For those that apply primarily because of what transferring the balances means for their cash flow, they may want to consider how this could affect what existing credit cards as well .
Overview of Benefits:
- Lowering your overall interest rates by consolidating what you owe on multiple cards with high interests rates onto one card with a lower rate (this will also lower what you need to pay each month)
- Transferring balances from higher interest credit cards gives more available spending power for new purchases - especially if the new card offers no or low annual fee
- Transferring balances allows you to close accounts that have annual fees or are not being used
- Transferring balances can be a great way of closing credit cards that have high interest rates but rewards programs that are unlikely to get any value from.
Creating an Appropriate Budget
What is balance transfer in credit cards?
Credit Card Balance Transfer Fees:
How much can I save?
What Can I Do With The Money Saved?
- going out to eat each week
- Weekly manicures and pedicures
- Bi-weekly salon visits - daily lattes or breakfast sandwiches
- monthly subscription services like Netflix or Amazon Prime.