If you have several credit lines, spread across various banking service providers and lenders, then you are probably having a hard time managing all those responsibilities. Provided you are eligible for such an offer, chances are one banking institution or another will make a balance transfer offer to you. Of course, terms and conditions apply, but such an offer is one you might stand to profit from, irrespective of your overall financial standing. What you need to know is how to make the best use of such an offer– balance transfer credit cards can either make your life a whole lot easier or, on the contrary, further complicate it. Read on below, to find out what you need to know about such cards.
Balance Transfer Credit Card Mechanisms
The actual details of balance transfers can greatly vary from one provider to the next. However, most lenders will most likely offer you a ‘zero interest’ deal, which you will be able to benefit from for a limited span of time. This rate, which only applies early on in the contract, is called an introductory rate. As you transfer your credit lines from other institutions to your new one, you have several options. You can either make the transfer yourself, or let your new lender’s representatives take care of the process for you. In both cases, you will still benefit from the zero per cent interest rate, which will most likely stay in effect throughout the duration of your first year with the new bank.
Can You Save Money with Balance Transfers?
Indeed, balance transfers do offer one the option on cutting down costs and potentially even saving up some cash. This applies both for persons who want to transfer all the crediting lines to a single institution for personal use, as well as to business credit cards. The biggest perk of such a move is that you will be cutting down on all the APRs you are currently paying. You are probably paying all your banks and lenders much more in interest than you ever should. This is especially true for people who have large balances. A balance transfer, which essentially means you’d be moving all your balances to a single card, will give you zero interest for at least twelve, or perhaps even for eighteen months. By cutting back on that cost, you will be saving quite a hefty sum, at least for the first year and a half.
Smart Debt Strategies
As discussed above, a balance transfer credit card will potentially give you the alternative of saving up quite a bit of money. What will you do with that money? If you’re using a business credit card in particular, perhaps you should look into the option of paying back the debt. After all, you have no interest to pay for twelve to eighteenth months. Why not take advantage if your new conditions and make them work in your favor. At the very least, even if you don’t manage to pay back the whole debt, you will at least have paid it down substantially, to a large degree.