Basics of Credit Card Balance Transfer
What is balance transfer? Generally, a balance transfer means that people can transfer from one credit card of the balance to another with a lower rate. As its name suggests, the balance transfer credit card is a credit card used to avoid the higher interest fee for consumers to make the balance transfer. Different credit cards require different balance transfer fee which is the charge used for transferring the balance from one credit card to another. However, some balance transfer cards don’t need such transfer fees.
People always like to pay off the balance on one or more credit cards existed by transferring the balance to a new credit card. However, they cannot transfer the balance to the credit cards when the amount of balance is more than the credit limit.
Here we'll make a discussion of the common questions involved in the balance transfer credit cards.
1. Why do people like to transfer their balance from one credit card to another?
It acts an important role for people to move the debt from one credit card with a high-interest rate to another one with a lower interest rate. People had better make it clear with some detailed tips related to balance transfers if they want to consider about this method.
The balance transfer credit cards are specially made to transfer the balance and to make the debt onto one single credit card. The balance transfer credit cards will be the most proper ones for people who want to make the balance transfer due to its significant advantages, like lower interest rates, 0% introductory periods, paying the debt without interest, etc. In general, the introductory period has about 9-18 months or some even longer. However, people who want to use such cards need to have relatively good credit.
What we mentioned in the following parts will be the primary reason that makes the balance transfer beneficial.
1.1. Please keep in mind that the debt is still there and it must be paid. The balance transfer doesn’t mean that people have paid the debt off but represents that move the debt from one card to another with low interest. People with debt can pay less money in interest fees to the lender.
1.2. People can use the balance transfer to consolidate all the debt onto one single card which means they don’t need to make multiple payments on different bank accounts and they’re able to make the payment once together. Thus all the things will become easier and less troublesome to track of the debt. Aside from that, people can also transfer loans to other cards.
2. Do you need to be aware of fees?
It can be as much as 3%-5% of transferred debt as for the balance transfer fee produced in the process. We all know that there are credit cards with 0% intro balance fee, however, after a period the fee will regain. Please keep in mind that the transfer rate will expire and make sure you will save enough money with the balance transfer to the credit card with the reduced interest rate. It will be another case though you start to pay your debt with 0% interest. Don’t make the balance transfer unless you make sure you can make your payments in full and on time.
3. What happens after you apply for a credit card?
It takes lots of time to invest and collect your information for those people who review your application before they make the decision. You can call the credit card company to check the status of your credit card. Generally, you will get a written response in a week after you submit your application.
With the paper, you will know whether you’ve passed or failed the application quickly. You had better find out the reason if you’re rejected. In general, the company will tell you why you are not approved, while you can ask them if they don’t. They will help you avoid the same mistake in the future.
You’ll receive your credit card in the mail once you’ve been approved within about one or two weeks. You can call the number listed on the card when getting your card to activate it and know your card limit which will often vary depending on your application conditions.