Do you wish to lower the interest rates on your credit card debt?
Credit card companies these days are luring new customers by offering them low-interest rates and other enticing. All you have to do is transfer the balance of your current credit card account to another company. In hindsight, this seems like a great option for a credit card user. You get a lower interest rate and get to start again with a blank slate. But is a balance transfer credit card really worth it?
What is a Balance Transfer Credit Card?
A balance transfer credit card is a service offered by a credit card company wherein you are asked to transfer the outstanding debt in your current credit card account to another credit card company. Most credit card companies offering this service are willing to give you an interest-free period of up to 3 months after the balance transfer. Moreover, they also entice a customer by offering incentives and loyalty points. Basically, they are offering you a better deal in return for your loyalty.
How does Balance Transfer Work?
But how does the balance transfer work? Is it going to be a tedious process? Here is the good news. No, the process of a balance transfer is not complicated at all. All you have to do is contact the new credit card company and give them your credit card details (like credit card number, account holder name, the name of the current service provider, etc). You can get this done via a phone call.
Next, they will contact your current credit card company and verify the details. Upon completion of the verification process, they will pay all your outstanding debt. That’s it!
Within the next 7-14 days, you will receive a brand new credit card with the balance transferred. If you wish to, you can continue to use the previous credit card account. The balance will be set to zero.
How to Make the Best of a Balance Transfer Credit Card?
When you opt for a balance transfer credit card with a new provider with an interest rate lower than that of the previous provider, you are already taking a step towards saving more money. Moreover, every credit card company has something new to offer, It is up to you to learn and understand their offerings carefully.
Secondly, if you are accepting a new credit card with a lower interest rate (particularly when it is lower just by a small margin), you must definitely be in some sort of a financial crisis. Hence, use the promotional low or zero interest rate wisely. Take this opportunity to build credit by paying your bills on time.
So, this is what a balance transfer credit card is and I am hoping you now know how to use it wisely. For those who are buried in a pile of massive credit card debt, it would benefit if you continued to switch credit card providers with lower interest rates.