Having multiple credit cards can end up being both somewhat of a
blessing and somewhat of a curse. In most cases, it ends up that
the cards with the highest interest rates are the ones that
carry the largest balances while the ones with the lowest
interest rates are the ones that go unused much of the time.
Luckily, many cards allow for the balance of one to be
transferred to and from other cards to make keeping your
finances under control much easier than it might seem at first.
The information provided below should help you to learn more
about the process of transferring balances from one card to
another and assist you in making the decision as to whether or
not you should transfer your balances.
Defining Balance Transfers
Balance transfers are simply the movement of all or part of the
balance of one credit card to another, usually from a card with
a higher interest rate or a card that is near the credit limit
to one that has a lower interest rate or that is nearly or
completely paid off. This allows you to avoid going over credit
limits, gives cards that have been used a lot a little more use
before having to begin paying down the balance, and helps you to
avoid paying the higher interest rates on older cards.
How Balances are Transferred
The actual act of transferring a balance is relatively simple...
the amount that is being transferred is charged to the card that
the balance is being transferred to, and the corresponding
amount is credited to the card that the balance is being
transferred from. Some cards allow a transfer to be credited as
a payment, whereas others do not... make sure that you know
whether your cards allow this or not before assuming that the
transfer will count as the payment that is due on your card.
The Best Time to Transfer Balances
Often the best time to transfer balances from one card to
another is before the next month's balance and payment has been
figured, because the lower the balance that you carry on
higher-interest cards then the less interest will be charged to
the card as a result. Transferring balances during promotional
interest periods can also be good, allowing you to pay a much
lower interest rate on the transferred balance and giving you
more time to pay down the balance before the greater interest
rate comes into effect.
Saving Money with Balance Transfers
One of the main advantages of balance transfers is that you can
often save quite a bit of money when transferring the balances
to a card with a lower interest rate. Balance transfers can help
you to avoid fines associated with going over your credit limit,
and by using a bit of common sense you should be able to keep
your credit card debts under control and transfer the
appropriate balances to enable to pay off your outstanding
balances more quickly and for the lowest interest rates
possible.
Balance Transfers with New Cards
When applying for a new credit card, many cards will allow you
to transfer the balance from older cards as a part of the
application process. This can be especially useful when done
with cards that offer a low fixed rate for an introductory
period, because you should be able to make quite a bit of
headway in paying off the older balances at the much lower rate.
Use caution, however, or you may end up with a new card that's
mostly full when it reverts to its standard rate.
You may freely reprint this article provided the following
author's biography (including the live URL link) remains intact:
About the author:
John Mussi is the founder of Direct Online Loans who help
homeowners find the best available loans via the
www.directonlineloans.
co.uk website.
