iQuanti: Balance transfers can be incredibly useful for consolidating and refinancing debt. Doing this can save you a lot of money on interest and make managing your debts simpler.
Fortunately, the process is also fairly straightforward, but there are a few steps involved to get it right.
Follow this process to knock out your balance transfer.
1. Note Down All Balances and Interest Rates
First, take note of every balance and rate you have. This will help you determine which balances you should transfer.Keep in mind that a higher interest rate can lead to more interest payments. If you're having trouble calculating your balances and rates, using a credit card interest calculator may be helpful.
Once you actually do the transfer, it'll help you keep track of your desired balances so you don't make any mistakes.
2. Pick the Right Card
A balance transfer is rarely a good idea unless you can secure a low interest rate on the new card.
Luckily, many balance transfer credit cards offer introductory APRs of 0% on balance transfers, often for 12 months or more. This gives you time to chip away at that balance interest-free.
So if you find a card with a long 0% balance transfer APR, applying may be worth it.
For example, say you transfer $3,000 and have a 0% balance transfer APR for 12 months. If you manage to bring that down to $400 before your 12 months are up, you'll only be charged interest on that $400 going forward.
Also, make sure the card you're choosing has a high enough credit limit to accommodate the transferred balances.
Finally, know the balance transfer credit card's rules about transfers. For example, same-company transfers may not be allowed.
3. Request the Balance Transfer
Now, you'll contact the card company with whom you hold the balance transfer card and request the transfer.
These days, most companies let you do this online. You'll have to select the card you'd like to move the balances to, then fill in the card info (such as card number and issuer name) for each card you're moving balances from.
However, you can also request the transfer over the phone. You'll need all the same information about the current cards and the balance transfer credit card.
4. Wait for the Transfer to Process
Balance transfers can take a couple weeks to finish processing. In the meantime, you might have to make one more payment on the old debts if their due dates are coming soon.
Not all issuers notify you of a completed balance transfer, so make sure to check all relevant accounts consistently until you see that it's gone through.
Speaking of that, the balance transfer issuer generally pays your old issuers for each of those debts, and it shows up that way on each of the old cards' statements. The balance transfer issuer then posts the total (along with a 3%-5% balance transfer fee) on your balance transfer card.
5. Pay Down Your Debt
Your balance transfer is complete! Now that these debts are centralized on one card, it's time to start paying it down.
Once again, a 0% balance transfer APR can pay off big-time here.
Balance Transfers: An Easy Way to Simplify Finances and Save Money
As you can see, performing a balance transfer isn't too hard. Just make sure you take stock of all your debts beforehand, pick the right card, and check your balances regularly until you see that the transfer went through.
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Original Source: How to Do a Balance Transfer on a Credit Card in 5 Steps
