How to Transfer Credit Card Balance in 5 Steps
A high credit card balance could be difficult to repay if the card has a high interest rate. Transferring the balance to another card with a lower rate could help you save money and possibly repay the debt faster. A balance transfer is a simple process that can often be completed in five steps.
Why Consider Transferring a Credit Card Balance?
How to Transfer a Credit Card Balance
2. Choose the Right Balance Transfer Card
3. Apply for a New Credit Card
4. Apply for a Balance Transfer
5. Start Paying Off Your New Credit Card
Tips for a Successful Balance Transfer
How to Consolidate Credit Card Debt Without Hurting Your Credit
Can I Still Use My Credit Card(s) After Debt Consolidation?
Take Advantage of the Low Introductory APR
Don't Close Your Older Credit Card(s)
How Much Can You Transfer to Another Credit Card?
When Should You Transfer a Card Balance?
Credit Cards with Red River Credit Union
WHY CONSIDER TRANSFERRING A CREDIT CARD BALANCE?
There are several important reasons to consider a credit card balance transfer. It’s a strategy that many use to repay their debts quicker and more efficiently.
You Could Save Money
Transferring a balance from a credit card with a high interest rate to a card with a lower rate could help you save money on interest. It could also help you pay off your debt faster. Because the interest rate on the new card will be lower, a higher percentage of the payments you make will go toward your debt instead of the interest.
Simplify Your Finances
If you maintain balances on more than one card, keeping up with the payments each month could be difficult. Miss one, and you could be hit with an expensive late fee. It could also harm your credit score.
Transferring your credit card debt to a single card may help to simplify your finances. You will only have one payment to keep up with each month, which could help with budgeting.
It May Help Your Credit Score
An important part of your credit score is known as the credit utilization. This represents the amount of available credit you’re using at a time. If your credit utilization is over 30%, it could negatively affect your credit score.
If you obtain a new credit card and transfer your balance, it could improve your credit score by lowering your credit utilization ratio. For this to work, you will have to keep your old credit card accounts open and not close them.
HOW TO TRANSFER A CREDIT CARD BALANCE
Transferring a balance from one card to another is a simple process. The following steps outline a standard process.
1. Check Your Credit
It’s important to check your credit score before applying for a new card to make sure your chances of being approved are good. Be sure to review your credit reports to see if they contain any errors. If you do find something, you can open a dispute with the reporting bureau.
2. Choose the Right Balance Transfer Card
Different credit card issuers offer cards with different Annual Percentage Rates (APRs). Because of this, it’s important to do some comparison shopping before applying for a card to make sure you get a great deal. Also, don’t forget to compare balance transfer fees.
Obtaining a credit card from a credit union is a simple way to get a card with a great rate. They usually offer better rates than banks because they are not-for-profit organizations. Therefore they don’t have to worry about earning a profit for investors, so they can offer great rates and low fees.
3. Apply for a New Credit Card
Before you apply for a new credit card, it’s important to read the terms and conditions to make sure you understand the restrictions, credit limits, fees, and other important information. If you have any questions, contact a representative for clarification.
Most card issuers now give you the option of applying for a card online. After filling out and submitting the application, you may be notified of the outcome by email.
4. Apply for a Balance Transfer
You can initiate a balance transfer request by calling the new credit card company. You may also be able to do it online. You will need to provide them with the account information for your old cards and the amount you want to transfer. The time to complete the transfer will vary depending on the card issuer and may take up to two weeks.
5. Start Paying Off Your New Credit Card
After the balance transfer is complete, you can start making payments on your new card.
TIPS FOR A SUCCESSFUL BALANCE TRANSFER
Although transferring a balance from one credit card to another is easy to do, there are some important things to consider. These things will help to ensure your credit score remains strong and that you repay your debt in a way that maximizes your savings.
How to Consolidate Credit Card Debt Without Hurting Your Credit
A hard credit check will be done when you apply for a new credit card. This will cause your credit score to temporarily decrease a small amount, which may last up to a year.
When shopping for a new card, it’s important to only apply for one card. If you apply for several cards to see which ones will accept you, a hard credit check will be done for each application. Several hard credit checks in a short period could harm your credit score.
Can I Still Use My Credit Card(s) After Debt Consolidation?
Although you can still use your old credit cards after debt consolidation, it’s important to use them sparingly to avoid adding to your debt.
It’s also important to not use your new card for shopping. Adding to the balance you transferred could make it more difficult to repay it during the introductory period, if applicable.
Take Advantage of the Low Introductory APR
If your new credit card offers a low introductory APR for a few months, be sure to pay off as much of your balance as possible during this period. This will help you to maximize your interest savings.
Don't Close Your Older Credit Card(s)
Be sure to keep your old credit card accounts open to help your credit score. The extra available credit will help to lower your credit utilization ratio.
How Much Can You Transfer to Another Credit Card?
How much you can transfer from one card to another will depend on the card issuer and your credit limit. Some will allow you to transfer up to 100% of your credit limit. Others may limit it to a lower amount.
When Should You Transfer a Card Balance?
Transferring a balance to a new card may be a good strategy when your card has a high interest rate and you’re struggling to make monthly payments. A new card with a low introductory APR may give you the time you need to pay down your debt.
CREDIT CARDS WITH RRCU
If you are thinking about transferring a credit card balance, Red River Credit Union offers credit cards with competitive rates, no annual fees, minimal service fees, and other great features. Our cards are ideal for a variety of needs.
Click on the following link to learn more about our credit cards.