How to Perform a Credit Card Balance Transfer
A Credit Card Comparison Service Will Help Save Money
Jun 20, 2009
Card providers rarely offer the best credit card deals to existing customers so trawling the market for a better offer is highly recommended. A credit card balance transfer allows a consumer to reduce interest payments and save money each month. Some offer interest-free transfers which can be used as a tool to reduce personal debt or free-up money for household bills.
What is an Interest-Free Credit Card Balance Transfer?
In order to attract additional business, providers offer new customers the opportunity to perform an interest-free credit card balance transfer. The new card provider arranges a transfer of the existing balance to the new card. Instead of paying the rate of APR previously, customers now enjoy a low or interest-free promotional rate for a defined period of time.
Are There any Charges for Performing a Credit Card Balance Transfer?
There is no such thing as a free lunch and this was never more true than when dealing with financial institutions. Card providers normally charge a 3% transfer fee or flat charge for moving the balance across to the new card. It will take about 2 months before the switch is worthwhile financially, but there are considerable savings in interest payments to be made over the medium term.
Perform an Online Credit Card Comparison
In order to save money, it is sensible to use an online credit card comparison service. Sites, such as moneysupermarket.com, trawl the entire market in order to identify the best deal. Once the right card has been identified, the application can be completed online. Once accepted, an interest-free credit card balance transfer can take place.
Further Advice on Interest-Free Credit Card Transfers
- Only apply for a credit card balance transfer if there haven't been missed or late payments. Customers with bad credit will almost certainly be declined by the issuer.
- Don't make too many credit applications as they will show on a personal credit report for 12 months. The more applications made, the more likely it is to be declined.
- Be aware that a transfer fee of 3% will be added to the balance. This means that the amount owed will be higher for the first few months, but will diminish over the medium term.
An interest-free credit card balance transfer allows a cardholder to reduce interest payments and save money. Always use an online credit card comparison service to identify the most favourable deal as there are literally hundreds of offers available.
Disclaimer: This article in no way attempts to give legal or tax advice. One should consult a licensed attorney, tax advisor, or other qualified professional.
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