Do These 3 Things After a Balance Transfer to Maximize Your Savings
After requesting a balance transfer, it usually takes about 14 days before the actual transfer is completed. However, receiving the long-awaited message from the card issuer that your funds have been successfully transferred is not the final step. After this, it is very important not to forget about some important things you better do so as not to run into unexpected expenses. What things are we talking about? Find out in this guide.
- Deal with Old Accounts
Once the balance is transferred to the new balance transfer card, make sure there is no more debt on your old accounts. If there is, congrats, great job! Issuers don’t typically require you to close your old cards, and those accounts will still be active until you yourself cancel them. This may be tricky, since if they come with some fees, e.g. an annual fee, you will need to continue to make those payments. And in case you couldn’t transfer all the debt, in addition to the fees, you will also need to make at least minimum payments on the remaining cards.
However, don’t rush to close the accounts with a $0 balance, think well. Especially if you own them for a long time. Account age contributes 15% to a FICO® Score, therefore closing old accounts may decrease the overall age of your credit history. But remember that if you keep those credit cards open, you’d better use them from time to time so that they are not closed. Just try not to increase your debt.
- Make Payments on Time
Even if your new balance transfer credit card offers a 0% intro APR period, it doesn’t mean you won’t be charged at all during these 12-18 months. Minimum monthly payments are an obligatory thing on any credit card. But we recommend that you pay the maximum sum possible for you every month, so as not to be left with a huge debt after the intro period is over. Or just calculate the monthly payment amount to pay off the debt without interest. Be sure, you will thank yourself later!
- Don’t Make Purchases with the New Card
This may seem obvious, but not everyone follows this. Remember that you have already transferred a debt to the card, which, perhaps, is not small. Spending more will only confuse you. You will need to pay off not only the transferred balance but also new purchases. No matter how tempting the conditions on the card are (even if it has a large cashback), it would be better to use another credit card for purchases. Be patient and wait until you pay off the entire debt in full.
These are the main actions that you can take after completing the balance transfer in order to avoid unnecessary spendings. And if you are still at the stage of choosing a balance transfer credit card to apply, be sure to pay attention to the top credit cards for balance transfers from our partners. Find the right offer with a 0% APR on balance transfers or a $0 balance transfer fee and other features and apply online.
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