3 Facts you Must Know About Doing A Balance Transfer
If your credit card debt is piling up and you feel like every payment you make is barely making a dent because of high interest rates, then a credit card with a zero-interest balance transfer offer might be the answer for you. Many cards offer balance transfers with a zero percent APR good for a year or even longer. This means every penny you pay goes towards your debt, and helps chip away at it faster.
But before you apply for a balance transfer card, there are a few things to know. Once you’ve educated yourself, sign up for the transfer and rest easy, knowing your debt will be paid off faster than you thought possible.
1. There will probably be a balance transfer fee. A no-fee balance transfer offer is hard to come by these days. In most cases, you’ll be charged a fee of three to five percent of the balance you transfer, or a minimum of ten to twenty-five dollars. Usually, paying this fee is worth it. But do the math first so you’re not shocked when that first bill comes.
2. You’ll still need to make the minimum payment on your card until the transfer goes through. The transfer may happen quickly, but it will likely not be immediate. Check with both your old card and the new one to see when the transfer is processed. It will look like a regular payment made to your card, and you should be able to see it reflected on your account statement online. If you have a minimum payment due, be sure and make it if the transfer has not yet processed. Likewise, if you haven’t transferred the entire balance to the new card, you’ll need to continue making payments to the old one.
3. Making your payments on time is more important than ever. With most balance transfer offers, if you make one late payment, you risk losing your zero-percent rate altogether. Your interest rate may jump to the regular APR, or possibly even a penalty rate. So be sure and make every payment on time, so you can be debt-free in the shortest possible amount of time.
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