You should, however, still consider the advantages and disadvantages of doing a balance transfer before you jump at the opportunity, since it may not be as cut and dry as you might think – as with so many things in life. Start New Financial has put together the following overview for this very reason, of the advantages and disadvantages of balance transfers. Each of them is broken down for you into more detail below. It is great that you can consolidate and move the balance of all your credit card debt into a balance transfer credit card with a lower rate of interest that has better terms than what you’re currently paying and take advantage of it. Your life is always more organized and simplified with debt consolidation, which brings you more peace by keeping a lot of stress at bay. Since you may not save money after the balance transfer fee is added, not to mention that you could end up with a higher interest rate after the promotion as well, you need to be careful of the fact that you can risk creating more debt where your credit score could also be impacted. Ergo, it is significant to find 0 balance credit cards with no transfer fees to fully capitalize. Just by calling Start New Financial TODAY and trusting everything to our caring hands, you avoid all risks of falling into any such inconveniences.
0% Balance Transfer Credit Card
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What is a 0% Balance Credit Card Transfer?
Are you making your payments on time, but just not getting ahead on your balances because of the interests on them? You likely weren’t aware of the wonderful fact that you can move the balance of one or more credit cards to another credit card with what’s called a balance transfer credit card, or credit card balance transfer (and some people even say balance credit card transfers) – you simply just cannot do it within the same credit card company, cannot pay off one credit card with another from the same credit card issuer, that’s all. Some credit card issuers offer special promotional interest rates on balance transfer for a set period of time in order to entice you.
The best of the balance transfer promotions is the 0% APR balance transfer, particularly 0 balance credit cards with no transfer fees, because it means that until after the promotional period you won’t pay any interest on the transferred amount AND you don’t even pay a transfer fee. As we said, the best credit card for 0% balance transfers are the 0 balance credit cards with no transfer fees, but even better are the ones with a real high balance limit and a long 0% interest period with a $0 annual fee – now those are truly the very best credit card for 0% balance transfers. If you qualify for such, this is a great opportunity for you to consolidate your debts and transfer their balances to a 0% balance transfer credit card! That is the big if, because you must have a very good to excellent credit score in order to qualify for a promotional credit card balance transfer with 0% interest. But do not fear that you may not qualify for a 0% balance transfer credit card until you check and see by trying it to find out. However, if you have a low credit score due to maxed out balances, a 0% balance credit card transfer would not be an option for you for a debt consolidation, because you won’t even qualify for the best credit card for 0% balance transfers if your credit score is not up to par.
A 0% balance transfer credit card is one that helps you pay off any outstanding debt while saving you money because during its entire promotional period, it has a 0% interest rate that allows you to move the balance from one or multiple cards where you might be paying interest over to it. Sometimes you can enjoy this promotional 0% balance credit card transfer for a grace period of up to 21 months and it’s always for at least 6 months by law. This is why a 0% balance transfer credit card is so popular for debt relief because many people use it for debt consolidation since it is so ideal for such.
You will never pay any finance charge on your balance transfer during the entire promotional period of a 0% balance credit card transfer as long as the terms of the agreement are followed by you. To put this into perspective, you won’t pay interest on your balance transfer for 12 months if your 0% balance credit card transfer has a 0% interest rate for 12 months – which would be the case because that’s what the 0% stands for.
The balance (and the balance transfer fee if you were charged one) is reduced with each one of your monthly payments since there is no finance charge. However, the regular balance transfer interest rate will go into effect on the unpaid portion of the balance transfer once the 0% balance transfer’s promotional period ends. Until the balance is completely paid off, you will continue to be charged interest each month when this occurs. This is why, when you’re able to pay off your entire balance before the promotional period ends, you get the maximum benefit from a 0% balance transfer. You can potentially save more than a thousand $1000 dollars by completely avoiding interest on your balance, which is why you get the maximum benefit from a 0% balance transfer credit card by paying it all off before interests kick in.
There are some hard-to-find 0 balance credit cards with no transfer fees, but it can be worth paying a fee for them if in the long run it saves you money. After all, saving money is always the objective. But you will still save money during the promotional period of a low-interest rate balance transfer credit card, such as a 2.99% one, if you cannot qualify for a 0% balance credit card transfer.
These balance transfer credit cards can help you save on interest payments while you pay down debt. 3%-5% of the transferred balance is usually the balance transfer fee that is charged by credit card balance transfers offered by most credit card companies, but they typically come at a cost. To put this into perspective, it can cost you anywhere between $15 and $25 for every $500 in debt that you transfer over in a balance credit card transfer.
Period with a $0 annual fee, are the ideal 0% balance transfers. As a matter of fact, in an imperfect world it would be the PERFECT one! The unfortunate reality is that these ‘triple-zero’ cards are so hard to find! A 0 balance credit card with no transfer fees is the creme de la creme of all balance transfer credit cards, but the terrible economic environment caused by COVID-19 is what has made these cards even harder to find than ever before.
But an excellent credit rating of typically 720 or higher FICO scores have always been required to qualify at all for many of these products and services, regardless of the balance transfer fee and the pandemic. By using a balance transfer credit card, the debt is still possible to pay down for less than what you’re facing in your present situation. Same-issuer transfers are not allowed by the majority of credit card companies. In order words, if your debt is with American Express, for example, you can’t move it to another American Express card. Wouldn’t it be so convenient if you could? Wow, having your cake and eating it too!
If you’re being charged a balance transfer fee on a balance that you had already intended to pay down in three months or less, you could actually exceed in fees the interest that you’d save in such a short period of time. So you may be better off sticking with the card you already have, when that’s the case. This is why it’s best to have excellent professionals like Start New Financial handling all your debts and finances, for we would get you everything that’s the most beneficial to you upon our thoroughly analyzing your complete situation and financial standing. The longer you need to get out of debt and the higher your current interest rate is, the more beneficial a balance transfer becomes.
As already mentioned, there have always been only a small number of 0 balance credit cards with no transfer fees, but now the pandemic has shrunk it to even smaller. Balance transfer credit cards at a lower cost are offered by some regional banks and credit unions, but these products come with their own limitations: Regional banks don’t operate in every state and credit unions require membership. In your area, you can simply check to see what your local banks have to offer you.
What are the Advantages and Disadvantages of Credit Card Balance Transfers with 0% Interest?
You can enjoy the great opportunity of at least 6 months of no interest with credit card balance transfers with 0 interest because the law requires that a promotional interest rate must last at least six months, unless you’re late on a payment. Yeah baby!
Advantages of a Balance Transfer
Some of the advantages of doing a balance transfer offer are:
The interest rate you enjoy on your new credit card is lower or you might get lucky and have a 0% balance transfer credit card with no interest rate at all. It all depends on the qualifications of your credit score and the promotion being flaunted. The lower interest rate is especially welcomed and beneficial when you currently have a high-interest rate on your existing credit card balance. More of your monthly payment will go toward reducing the balance of your balance transfer credit card, instead of it all going towards interest, since you’ll have a lower interest rate and possibly no finance charges. By transferring the balances of your high-interest debts to the new 0% balance transfer you can have yourself an ideal debt consolidation! By the time the promotional period ends, you may even be able to pay off the balance completely in your balance transfer credit card, since you’ll be working with a high monthly payment with a long promotional period.
It allows you to transfer your balance to a balance transfer credit card with better terms. Being that your balance will be moved to a more favorable credit card that rids the bad terms that your current credit card may have – such as a short grace period and high fees – you can go ahead and close the books on your old credit card account for good. Credit card rewards on your new purchases may even be offered to you on your new balance transfer credit card!
You can close your old account after its balance is completely transferred over to your new balance transfer credit card and you are sure that your credit score won’t be hurt.
When you consolidate your credit card debt, you more conveniently can very comfortably leave yourself with fewer credit card payments to make each month. Making multiple credit card payments on several different credit cards is a hassle you eliminate when you transfer those multiple balances to a single credit card that has a high enough credit limit to withstand their transfer. Remembering to pay off several credit card balances instead of just one single one is much more difficult and cumbersome. This is great debt relief! 0% balance credit card transfers are a dream come true for those who qualify for them and can find them.
Disadvantages of a Balance Transfer
The potential downside of transferring a balance to a new credit card must also be considered always, even with a credit card balance transfer offer.
You might be disqualified for a promotional interest rate by your existing debt, income, or credit score, which could lead to you ending up with a higher interest rate. A consumer typically has to have an excellent credit score in order to obtain a low-interest rate balance transfer credit card offer. A regular, higher balance transfer rate of interest is all the consumer will qualify for if their credit score is not appealing.
Balance transfer credit cards can get quite expensive if you don’t know or aren’t aware of what you are doing if it happens to carry an annual fee on top of the balance transfer fee. Before you transfer the balance, you must factor in the full cost of moving your balance to a new card and also be sure to compare the interest you would pay if you were to leave your balance on your old credit card. That’s because, in the long run, situations may arise where it may cost less to leave your balance on the original credit card.
As mentioned earlier, the typical balance transfer credit card fee is from 3 to 5% of the balance you’re transferring or $5, whichever is greater.
It is possible for a credit card balance transfer to hurt your credit score. If you apply for and open a new credit card account, your credit score can be negatively affected by it. In addition, your credit score takes a hit anytime your credit card balance is above 30% of its credit limit. Your credit score could drop if there isn’t sufficient credit available in the credit card that you perform your credit card balance transfer to.
If your credit card payments are timely each month, you not only reduce your balance, you can even wonderfully recover lost points.
You could run the risk of more debt. When you do a credit card balance transfer to a new credit card, you suddenly find yourself with more credit available to you. It takes great discipline in order to overcome the temptation of making purchases on your old credit card, or else your total debt will increase from what you began with. If, in order to remove any temptation of racking up more credit card debt you must close out your old credit card, then so be it.
Since there can be some drawbacks, think about the long-term effect on your finances that doing a balance transfer to a new credit card can have. A balance transfer credit card is the well worth it ideal thing to do if it will ultimately help save you money and help you pay off your credit card debt any faster. After all, that is the main objective, right? Give Start New Financial a call for your free consultation and savings estimate and we promise to provide you all the help you need and more, to help you become free from your debts as soon as possible while saving you the most money too. We offer the best debt relief with our world-class debt settlement program.
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Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes. *Clients who are able to stay with the program and get all their debt settled realize approximate savings of 46% before fees, or 25% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating.