A balance transfer credit card isn’t something that everyone can take advantage of, but you may come to learn that it’s just what you need to improve your finances.
As the name suggests, a balance transfer credit card allows you to move several balances under the same roof. For example, if you have a $5,000 balance on three separate credit cards, you can use a balance transfer to consolidate them. In the end, you’re left with one account with a $15,000 balance.
There are many reasons to use a balance transfer credit card, including but not limited to the following:
To Better Manage your Credit Card Balances
It can be a challenge to manage more than one credit card balance, especially if you’re not the organized type. When you only have one account, it’s much easier to manage your balance, which reduces the risk of making a mistake (such as missing a payment). This can also reduce stress in your financial life.
To Save Money
When you have separate balances, you’re paying interest on all of them. And over the course of a month (or longer), it can really add up. With a balance transfer credit card, you only pay interest on one account. Along with this, you’re likely to qualify for an offer with a zero percent introductory rate. This typically lasts for 12 to 24 months. During that period, there is no interest charged on the balance you carry from month to month.
To Split Debt
For example, if you’re going through a divorce, you realize that you need to split joint credit card debt in half. Using a balance transfer credit card allows you to take on your portion, while your ex-spouse takes on theirs. At that point, you’re no longer managing the debt as a couple. It’s in your name only, so you can do whatever you want.
You Have Options
Now that you know some of the better reasons to use a balance transfer credit card, it’s time to start your search.
There are hundreds of offers to choose from, thus allowing you to get one that most closely matches your requirements.
Some of the many things to look for in a balance transfer credit card include:
- Balance transfer fee (this will vary from one issuer to the next)
- Length of the zero percent introductory period
- Interest rate after the expiration of the introductory period
- Credit limit
If you keep these details in mind during your search, you’ll find it much easier to narrow your options in a timely manner.
Don’t rush into applying for a balance transfer credit card. Take your time in deciding if it’s best for you and your financial goals. If it is, compare a minimum of three to five offers and then apply for the one that best suits you. Soon enough, you’ll have all your credit card debt under one roof.