If you’ve gotten a new credit card, you actually have a few options at your disposal that you will want to make sure that you check out. Indeed, one of the biggest options that you have is a balance transfer. This is just having the old balance from one card transferred to a new credit card. Now, you might wonder why you would want to even shuffle debt from one card to another. However, there is a strong reason to do this, and it actually makes a lot more sense than you might think. For example, you can tap into balance transfers when you get a new credit card that has a lower interest rate than what you were paying on the old card.
A demonstration of this principle is quite simple: think about two credit cards. One of the credit cards has an 18% interest rate, while the other credit card actually has the 0% introductory rate that you want. If the card with the high interest rate has a high balance, you would do well to transfer the balance to a new credit card completely. This makes it easier to bring the balance down faster since all of your money will count towards the principal balance rather than be eaten up by interest charges.
You might wonder why a credit card company would even want to give you a card with a zero percent introductory rate, but there are also a few reasons for this as well. The biggest reason they have to give you a zero percent interest credit card is that it builds loyalty — even after the introductory period goes away and you have a low APR to deal with, you will still feel a lot better than if you had just stuck with a high interest credit card. This feeling can lead to staying with the new credit card a lot longer than if they didn’t offer you anything at all.
Are balance transfers right for everyone? Well, it definitely depends on what you’re trying to get done, as well as what your spending habits are actually like. The reality is that you will need to make sure that if you carry out a balance transfer, you will need to pay off the balance on the new card in the proper time period.
Overall, handling a balance transfer for a new credit card isn’t difficult at all — with the tips presented here, you should accomplish your goal in virtually no time at all!