You must be considering to transfer your credit card balance to another card issuer because of high interest rate. It’s a very wise move as you will save a lot money by saving on interest rate money from new issuer. In this way, you will clear your debt faster by saving finance charges.
Let me guide you with all the process in transferring credit card balance:
1. Fully Understand about Transferring Balance.
Transferring Credit Card Balance is a good technique to save some money by not paying interest charges. But there are some points which are not commonly discussed while transferring. Before you go to next step, You have to fully understand everything it involves and then decide if you want to proceed or not.
- There are often charges of 3% fee on the total balance amount being transferred. So before you transfer, always calculate the both side of transferring and not transferring. Compare them and decide if it is beneficial for you to transfer or not.
- Balance Transfer happens due to interest-free payment to new card issuer but the interest-free period is not permanent. It may last from 6 months to 15 months at 0%.
- Always know the Regular APR of the new card issuer before moving to because you will have to pay on the remaining balance after the interest-free 0% APR period is over.
- You will enter into a new deal with new card issuer of 0% APR but it will get canceled if you miss any payment during your interest-free period. So you better not miss your payments otherwise you will end up paying interest rate of new card issuer which could be same or higher than the old issuer.
- Most of the time, Balance Transfer Deals are only available to Very Good Credit Holders. It means if you are not having required score for 0% APR, you won’t get it. Then you can only try your luck for some low APR card issuer.
2. Applying for Credit Card Balance Transfer:
Now after knowing everything and getting full education about balance transfer, you will now try to find the best option available for the transfer. There are so many factors that you can consider while selecting your new card issuer. Many promotions also go on related to credit card balance transfer so you have to check which issuer is charging the lowest balance transfer fee and having longest interest free 0% APR. Calculate and find out how much you will be paying each month and how long is the interest-free period. If the monthly payment is high then look for another card with longer 0% APR interval.
Once you have decided on a card which you think is right for you, then apply for it in online application and wait for the response.
3. Collect Account Information:
Now once you have received your interest-free 0% APR Card, you will need to gather some information which you will require to transfer the credit card balance. You will require the exact amount you are transferring and the account information related to the card from where you are transferring the debt.
4. Call the New Card Issuer:
Now you need to place a call customer support center of your new card issuer who is providing 0% APR card. Explain them that you would like to transfer your credit card balance to your new credit card from the old one. Then they will ask for some information related to your account.
Now your job in done, they will contact the old credit card company and transfer the balance you have told them onto the new card. The process will be complete by one or two weeks and then you will have your debt with zero interest on new card.
5. Do Planning to clear your debt:
Now that you have got ridden of your high-interest rate card, its time for you to make a plan to pay off your debt from new card. If you don’t plan and in any case if you miss out the due date to pay then then you may have to start paying debt on regular APR Interest.
Tips to clear your debt faster:
- Create a Budget Plan: Create a plan where you are not spending too much on unwanted things and you are saving more money to make hefty payments towards the interest free debt.
- Get rid of extra expenses: After you transfer the balance and calculate the monthly payment you need to pay to clear off the debt before the interest starts accruing. Once you calculate the Monthly payment, You will need to start cutting down all the extra expenses, at least for now, to be able to clear off your debt faster within interest-free period.
- Keep tracking your expenses: Always note down all of your expenses and keep the track of it. Analyse your expenses and control it wherever it is not required.
- Continue with the routine: Now you will develop a habit of tracking your spending which is a very good thing for you to also not get into any debt in future. So once you are out of this current debt, then don’t jump into another.