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What is a balance transfer, and is it a good idea? A balance transfer means that you take the balance you owe on a credit card and transfer it to another credit card to save money. Many people transfer balances from credit cards that charge high interest to cards that charge less. Credit card companies offer great low introductory interest rates to get people to do that so they can have their business. It makes good sense if you’re going to save a lot on interest rates. And sometimes it can simply ease the burden of debt by putting all your credit card debt in one place.

What is a balance transfer offering you as far as debt relief? First, understand what APR is and how it affects your debt. APR is the annual percentage rate on your card. Most cards carry APRs between 15% and 21%, with some going even higher. That’s the interest that’s added to your card’s balance monthly. If you have a few cards with interest rates like those, and you can transfer those balances to a card that’s offering no interest for a limited time, or very low interest, you’ll have either no money added to your account each month in interest fees, or the amount will be substantially lower on the new card.

What is a balance transfer with no transfer fee? Most cards charge a one-time fee to allow you to transfer your other credit card balances. But some offer you the opportunity to transfer your debt to their no- or low-interest card without charging you a balance transfer fee. It’s just one more way to save money, and for them to entice consumers to use their cards.

What is a balance transfer going to do to my credit? Depending on how you do it, it can hurt your credit, or help it. Don’t transfer a balance and then close out the old card right away . This can negatively affect your credit score. Instead, make tiny purchases on the old card and pay them in full to improve your credit score.

SmartCreditChoices.com has many credit card offers including 0% APR balance transfer credit cards.

Jake_Wilson

Tags: credit card companies, credit card balances, credit cards, Debt Relief, irs

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Tags: cards, credit card balances, credit card companies, credit card debt, credit cards, credit score, Debt Relief, irs