You may be considering a balance transfer if you are carrying debt on a high-interest credit card. It a good technique to consider since it will save you money on finance charges and help you pay off your debt faster.
Here are five simple steps to help you transfer your credit card balance:
1. Learn about balance transfers
Balance transfers are a good opportunity to save money on interest, but there are a few quirks to this debt payoff technique that aren’t commonly discussed. Be sure you fully understand and are comfortable with them before taking the next step:
- The interest-free period on your new card won’t last forever. Most cards only give you 6-15 months at 0%.
- After your 0% APR period is up, you’ll have to start paying interest on your remaining balance, so know the ongoing APR of the card you’re moving your debt to.
- If you miss a payment during the 0% APR interval, your deal will likely be canceled, and you’ll have to start paying interest right away.
- Transferring a balance often comes with a fee of 3% of the amount you’re moving onto the new card. Be sure to factor this in when you do the math to determine whether a balance transfer is right for you.
- Most balance transfer deals are only available to those with very good credit. If your score is sub-par, you might have better luck transferring your debt to a card with a low ongoing APR.
2. Apply for transfer credit card
Now it’s time to find and apply for the card you’ll be transferring your balance to. There are lots of offers on the market, so make sure you do your research to find the best credit card for you.
As you’re comparing cards, be sure to pay special attention to the length of the 0% APR period and the balance transfer fee. Ideally, the card you pick will have a low fee (or perhaps none at all) and a long 0% APR promotion.
Additionally, figure out how much you’ll need to pay each month to eliminate your debt before the interest-free period is up – doing so means you’ll be squeezing the most value out of the balance transfer. If the payments are too high with one card, look for another with a longer 0% APR interval.
Once you’ve found the card that’s right for you, complete the online application and sit tight for a response!
3. Gather information
Once you’ve received your 0% APR card, it’s time to gather the materials required to transfer the balance. Specifically, you’ll need the account information for the card you’re moving the debt from and the exact amount you want to transfer.
4. Make the call
Now it’s time to call the 0% APR card’s customer service center. Explain that you’d like to transfer a balance onto your new card, then provide them with the information you just gathered.
After that, your job is done – they’ll get in touch with your old credit card company and move the balance you specified onto your new card. This can sometimes take a week or two to complete, so be patient!
5. Plan how to pay off your debt
Escaping the stranglehold of sky-high interest rates is something to celebrate, but it’s no time to rest on your laurels.
Follow the tips below to create a detailed debt payoff plan; this will ensure that your balance will be gone before the 0% APR period is up:
- Create a budget– Make a strict spending plan that accounts for a hefty payment toward the 0% debt. Then follow it!
- Eliminate extras (for now)– You should have already calculated the amount you need to pay each month toward your 0% APR card to get rid of the balance before interest starts accruing. But consider that your “minimum” payment – paying more will get you to debt-free faster. Cut unnecessary expenses for now to free up extra cash.
- Track your spending– The best way to make a budget work is to keep tabs on your spending, so don’t let a dollar go untracked.
- Keep going– Even after your 0% card is paid off, keep up with budgeting and tracking your spending. That way, you won’t have to worry about credit card debt in the future!
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