Balance transfers can be a positive money management tool if you know what you are doing and then do it right. Transfers are an easy way to manage balances and save on interest. It’s a great feature that is unfortunately not readily offered to credit challenged people who need it the most. There are many reasons why a budget transfer would come in handy. The following is a list of five great reasons to look into a transfer.
1. Relive interest when you can’t pay in full. Some people use their credit cards and pay the balance off in full. It is a safe way to manage payments. Instead of carrying the balance over to the next month and having interest to pay, avoid it by transferring the debt to another card. It will give you another 30 days to pay the debt off without interest. If you have good credit, there is no reason why you should pay interest fees.
2. If you never seem to get the principle balance down with minimum payments, a balance transfer with a lower interest rate will make a significant difference It is a perfect way to simplify your debt into one easy payment.
3. There are great rewards to some introductory offers. A balance transfer is often included to get bonus rewards. If the new card has a lower rate, you have won twice.
4. Get away from high APR rates. If you have taken out an alternative cash loan or a have a credit card with rates that keeps going up, take advantage of a low introductory offer. Know when that introductory rate will end and what the regular rate will be. Pay as much as you can while you have low interest. It’s the best way to break down debt.
Don’t use this option too often. Creditors do hard inquiries to your credit report in order to approve your application. Too many hard inquiries can damage your credit report. A pre-approved offer is not a guarantee of acceptance or the lowest rate. Call the creditor and find out what credit score levels they approve. If you are interested in a balance transfer and are unsure how to do it, the creditor will help direct you through the process. It’s a good tool to use to help support a balanced budget, but like any other tool, it must be used in moderation.