Top 5 Balance Transfer Credit Card Companies
Find out how to get the best balance transfer card
Here are our Top 5 picks for the best providers of balance transfer credit cards...
- Capital One Quicksilver
15 months at 0% transfer APR, with a host of other benefits
- Chase Freedom
Earn $150 bonus after you spend $500 on purchases
No annual fee or penalty APR
- American Express Blue Cash Everyday
Cashback from supermarkets, gas stations and department stores, plus much more
- Citi Simplicity
No late fees, no penalty rate and no annual fee, ever!
Top 5 Tips for Balance Transfer Credit Cards
It’s not uncommon for someone to find themselves going into debt because of credit card purchases they struggle to pay back because of high interest rates. One tempting option for eliminating the credit card debt it to essentially pay it off with another credit card. This debt can be added to an existing credit card or a new credit card with a lower interest rate. How is this done? Who can do it? What are the consequences and benefits? All of these questions will be answered throughout the course of this article.
How Does It Work?
There are two basic ways in which a person can transfer balances from one credit card to another. The first, and easiest, way to do this happens if you already have a second credit card with a lower interest rate. In this case, simply pay off the credit card with the higher interest rate with the card with the lower interest rate. So long as you have not reached your limit on the card with the lower interest rate, this should work smoothly.
The second way to do this, which is a little more complicated, is to get a brand new credit card to put the old credit card debt on. This is more complicated because you need to first apply to get a new card. Once you are accepted and get the new card, simply pay off the old card with the new one.
Either of these methods can be used to transfer the debt from one or more credit cards to another. When transferring debt, it’s best to put it all on one credit card with a low interest rate, rather than to move the debt to several credit cards with varying interest rates.
Who Can Do It?
Can anyone use a transfer balance credit card? Sadly, no. For the most part, whether or not a person can transfer their credit card debt all depends on what their credit score is like. The higher a person’s credit score, the more likely they will be able to get a new credit card. There are a few ways to find out a credit score. Using online tools and free websites can give a good estimate of your credit score.
Even if a person is not trying to get a new credit card, and instead of putting their debt onto a credit card they already have, it is not always a given that they will be able to do so. When this is the case, it depends mostly on how much room they have left on their card with the lower interest rate (before they reach their limit). If the transfer were to go above the limit, it just won’t work. However, if the transfer is less than the limit (including what you may or may not already have on the card), then it should work.
What are the Consequences?
Like any other business, credit card companies aren’t happy when they lose a customer. For this reason, transferring balances to another credit card and canceling an old card sometimes comes with consequences. If you have a contract with your credit card company, you may be subject to cancelation fees. This can cost a pretty penny. However, in the long run, you are likely to save more money by canceling a card with a high interest than sticking with it.
Once you transfer your credit card debt from one card to another (and cancel the old card), it’s time to start paying off the new card. Even if you pay off a credit card with another credit card, you still need to pay off the total debt. Luckily, it should be less expensive in the long run once you get a card with a lower interest rate!
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