One of the major ways of saving thousands of dollars on your credit card is by doing a simple balance transfer. Now, many people do not know what balance transfer on a credit card is. In layman’s terms, your credit card debt balance can be transferred from one bank to another, to take the advantage of a lowered interest rate. However, there are a few myths which are associated with this particular feature. Not surprisingly, these are mostly spread by banks who do not want you to transfer because they would prefer to charge you a high interest rate. However, balance transfer is one of the easiest things to do when you are approaching a state when your credit card interests are high, and you feel pressurized and upset about the growing interest rates.
So, how do you make a balance transfer?
Well, the procedure is quite simple, and it does not take much time at all. First off, you need to do a bit of research about the best balance transfer options. This is one of the easiest things to do if you have the internet. You will, within minutes, find a huge number of options to pick from.
Second step would be to go through each one of the banks’ details carefully and check interest rates. The key here is to find interest rates which are considerably lower than your average interest. At present, many cards can charge you huge amounts of money as interest, some going for around 20% of interest, which is a huge sum. You should ideally look for one which gives you a single digit interest rate, preferably lower than 6%, which is pretty much acceptable.
Then, you need to start the procedure of balance transfer. At this point, checking your credit score would be great. You will likely have a good credit score if you don’t max out your cards, and you make your payments on time. Your credit score will drop if you do these things, so be regular with payments. You can get an agency online to do the credit score check for you, and see if yours is acceptable or not. Once you know that your credit score is acceptable, the next step for you is to go for the balance transfer procedure.
Now, ideally, this procedure online, takes a really short period of time. You would find a considerable number of banks which are willing to offer you that on your credit cards. Accept and get your scores improved. You would see the immediate changes in your spending – instead of spending thousands of dollars on interest rate, the charges will drop dramatically. Remember, generally you will need to pay a certain fees as a one-time balance transfer charge. Do not hesitate to pay it. Calculate the average amount you will be paying in the next few months in interest if you are doing a balance transfer. If you see that your fees will be recovered in a month or two, immediately think of the next one year’s savings you will be making, and go for it.