Understanding the Balance Transfer Process
The balance transfer process can seriously save you money on interest payments and help you reduce your credit card debt, as long as you’re aware of what your obligations are and how to make the most of your introductory low interest rate period.
Before You Apply for Your Balance Transfer Credit Card
Before you submit an application for your new credit card, take some time to research your available options. There are plenty of balance transfer offers available, so be sure you choose the one that is most suited to your own personal financial situation.
Transferring Your Credit Card Balances
Once your new card is opened, you’re able to transfer your existing credit card balances over to the new account. Be aware that you may have a limited time to complete the balance transfer process, usually around 30 days with the majority of lenders, in order to qualify for the low introductory interest rate offered.
Benefiting from the Balance Transfer Process
The balance transfer process is as simple as shifting your old balances from your high interest credit cards over to a much lower interest rate. It sounds great in theory, but in order to really get the best out of these, you should understand how to benefit from them most.
While you might only be paying a very low rate on the balance amount you transferred, be aware that this rate won’t always apply to any purchases you pay for using your credit card.
You should find that purchases are charged at a much higher rate and your credit card provider will allocate your payments according to paying off the amount being charged the lowest rate of interest.
This can mean the amount you spent on your purchase won’t be paid off until after you’ve repaid the original balance transfer amount. The purchase amount will be attracting a higher rate of interest until that time.
While there are plenty of ways to benefit from the balance transfer process, it’s vital you make sure you’re using your card for the purpose it was intended for. This way you have the opportunity to pay far less interest on your outstanding balance and finally begin to reduce your credit card debt once and for all.
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual fee | Cash Advance Rate (p.a.) | ||
|---|---|---|---|---|---|
 ANZ Low Rate MasterCard – Balance Transfer |
0% for 3 months (reverts to 13.39% ) | 0% for 3 months | $58 | 21.49% |
  |
 Citibank Clear Platinum Card |
11.99% | 0% for 12 months with 3% handling fee | $99 | 21.74% |
|
Related posts:
- Understanding The Balance Transfer Process And Making It Work For You
- Defining Balance Transfer Credit Cards
Posted on Sunday, December 5th, 2010 at 12:00 pm
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