Credit card balance transfer is a tool that should be used wisely. Here are our tips if you must use it.
Balance Transfer Credit Cards For Fair Credit
Our readers are encouraged to be good stewards of their personal finances before starting with points. For example, to have an excellent credit report, it is important to master various concepts :
- Punctuality in the payment of its due dates
- The ratio of use of its available credit
- Credit history
- Types of credit held
- New credit requests
Credit card balance transfer can help those who find themselves temporarily stuck with high credit card interest rates, provided you do it right .
A Lower Interest Rate Means You Pay
Most credit card issuers, from time to time, offer balance transfer offers with low interest rates. The goal is to attract your customers by offering rates from 0% to 5% , well below current rates of 19% and more.
This lower interest rate can be life saving if you are currently paying interest on your credit card balance. However, it will be necessary to pay attention to all the modalities imposed in the context of the balance transfer .
The terms to be observed
There are different terms and conditions surrounding a credit card balance transfer, and failure to comply can be counterproductive!
Balance transfer fees
Credit card balance transfer offers often come with a fee (around 1-3% of the transferred amount). These fees will depend on each credit card issuer, but also on your province of residence.
Here for example an offer to 0% for 12 months for residents outside of Quebec:
Credit Card MasterCard ® True Line ® MBNA - Outside Quebec
The balance transfer period
Generally, you will be able to perform a credit card balance transfer for a limited period of 90 days from the date you open the account .
This is a way, for example, of consolidating different credit card balances on the same card. So plan your shot well so as not to exceed the promotional period .
The duration of the promotional interest rate
The promotional balance transfer interest rate has a term typically ranging from 6 to 12 months .
This means that your transferred balance will be affected by the promotional interest rate only for that duration. Beyond this period, the standard rates will apply.
Again, make sure you plan your balance transfer well by including a plan to repay your balance for the duration of this new term.
Clauses on missed payments
Make sure you don't miss ANY payments on your new card.
This is because the terms are often accompanied by “rate in the event of default”: if you miss several consecutive payments, the promotional interest rate will cease to apply and the rates will rise to the level of the standard rates.
As with any new credit card application, take a few minutes to read all the terms and conditions before subscribing!
Our additional tips
Transferring a credit card balance may be a backup route. However, it will be necessary to be particularly vigilant in the management of this debt . Here are 3 other tips to follow.
Plan your repayments
Make a debt repayment game plan by scheduling regular payments over the term of the promotional rate (6-9-12 months).
Have you transferred $ 6,000 and benefit from a promotional rate of 0% for 12 months? Schedule payments of $ 500 per month for the next 12 months to completely erase your debt.
Temporarily stop using credit
Credit card balance transfer should not be an opportunity to continue down the path of debt. Take a break from credit to pay off your current debt.
No purchases on the new card
In order to see more clearly in your finances, do not make any new purchases with your new card. Be satisfied with gradually repaying the transferred balance according to the established schedule.
Make an appointment with a specialist
Do not wait until you are in trouble to make an appointment with a personal finance specialist. This could start with your bank advisor who can offer you financing solutions that are much cheaper than credit cards, for example!
https://milesopedia.com/guides/transfert-solde-carte-credit/#Nos_conseils_additionnels
