Balance transfer allows people to transfer their existing credit card debt to a new credit card with a lower interest rate or 0%. This usually means people can pay their debts faster and save significantly on their interest expenses. There are many incentives to transfer balance in the market and the promotional period can vary from 6 to 36 months.

Balance transfer credit cards
A balance transfer allows people to transfer their existing credit card debt

In the previous post, introduces people to some of the necessary information that is useful for building credit to get more information people can read the article You need to build credit immediately to get the best credit history. Now, let find knowledge about balance transfer in the post today.


Just like a lot of article posts about finding your credit rating, mortgage interest rates, can you get a loan with bad credit, personal loans for people with bad credit rating…. this post about balance transfer also includes some main parts. They are:

1. Some way to choose the best balance transfer card

Finding the best balance transfer card can be a ticket to help customers get out of debt faster. When comparing balance transfer cards, here, what should people consider:

Introducing the APR phase. On average, people will find 12 to 15 months of interest-free preiod credit cards, but some cards offer an APR referral time as long as 21 months. Having a longer APR referral stage gives people more time to consolidate their finances.

Balance transfer fee. Depending on the credit card people choose, people may be charged between 3% and 5% of the amount they send. If people move a large sum of money, 2% can make a big difference. Some cards issued by a credit union do not have a balance transfer fee.

Annual fee. You are trying to save money, at no extra charge. Fortunately, most credit cards have a 0% APR referral time when transferring balances with no annual fee.

Balance transfer limit. Balance transfer limits could be 75% or 100% of the available credit line or it could be up to a certain amount, such as $ 15,000. Read the terms of the card before people apply or speak to a customer support representative and ask about the amount people can move.

2. Some benefits of balance transfer

Balance transfer credit cards are designed to give you breathing room to pay off your debt for free during the promotion period, which can last up to 21 months. Depending on the size of your debt and the interest rate you are currently paying, this can save you hundreds or thousands of dollars.

Credit cards issued by credit unions are usually free of charge transferring balance. Assuming you’re trying to transfer your balance of $ 6,000, you could potentially save $ 300 in transfer fees.

Pay high interest. This is a no-brainer. If you are stuck in paying high interest rates and you have a good credit score or higher, your balance transfer card may be the way you get out of debt.

0 balance transfer credit cards
A balance transfer allows people to transfer their existing credit card debt

Pay multiple balances. If you have multiple balances for which you have paid off your interest, a balance transfer can help you transfer all your balances into one account. This not only saves you money but also simplifies your monthly payments in just one account.

3. Some mistake when choosing the balance transfer

Thinking of 0% interest means not paying

Even if you are paying 0% p.a. For your balance transfer loan, you must still make at least the minimum payment for each statement period. This is often stated as “3% of outstanding balance or $ 30, whichever is greater”, although percentages and dollars may vary between cards. You can check the minimum payment requirements by viewing the review page for each card or by viewing the main information that credit card providers must share with you before you sign up.

Only pay the minimum debt each month

Although you have to pay a minimum amount of money each month, it can take years to pay off your debt if you only pay this amount. Instead, it is wise to make larger payments and write off the entire debt before the 0% referral period ends. How much you will pay per statement period depends on the size of your debt and the length of the promotional period.

Below is an example of how much you have to pay each month to clear a $ 10,000 debt for 6 to 24 months if you have 0% p.a. interest rate.

Buy new items with your card

If you use your card to make a purchase, it will charge you a standard purchase rate and may make it harder for you to pay off your debt. Credit card issuers are also required to allocate repayments for the debt that is charged with the highest interest rate in your account. So, if your balance transfer has an interest rate of 0% and your purchase captures 19.99%, then your payments will be transferred to a pre-purchase instead of transferring your balance.

Even if your card has a 0% referral rate for new purchases, you should focus on repayment instead of making more purchases. It should also be noted that interest free days do not apply to purchases when you carry a debt from balance transfer.

Keep your old card open

When you receive your balance transfer, it’s your responsibility to contact your current credit card provider and close your old account. If you can’t, you may end up paying account costs for a card you don’t use. Before you close your card, make sure the balance is completely or fully paid and transfers any regular payments (like direct debit) to another account.

This post is information about balance transfer in the USA. Also if you are looking for information about personal loans in Australia, you should read a lot of articles of such as You need to consider carefully before choosing online loans Australia

Personal loans in Australia have a different interest rate and fee with personal loans in New Zealand. Therefore, if you want to know about the personal loans in New Zealand, you should read the article from such as Small cash loans NZ help people looking loans for emergency expenses…

Hillary (Team Content) – Balance transfer