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Sometimes having a huge credit card balance with a high-interest rate may appear impossible to pay off. However, you can save yourself from this by having a low-interest rate credit card to which you can transfer the balance to. Consequently, this will help you in saving money and settling your balance earlier.
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Balance transfer credit card to solve your credit card debt
According to a recent US News survey most Americans said they didn’t have a credit card debt. But some indicated that having a credit card debt restricted their spending. Having a credit card debt can prove to be a challenge especially regarding how you settle bills. As a result, this can push you even into more debt. Sometimes you may be unable to pay for let’s say car repairs or groceries and you have to put this in a credit card with a balance.
The best way to get your financials on track is by using a balance transfer credit card with a 0% introductory rate. Despite this being a good way of getting out of debt is unfortunate that 47% of Americans have never tried it. For those with a good credit score, the 0% introductory rare is an avenue of saving on the interest that you will have paid.
Continue making your monthly payments
The balance transfer credit offers you the ability to pay your credit card debt interest-free. There are however some rules to observe so that you do not mess up. To begin with, you should not stop making your monthly payments on the old card. The balance transfer card takes around two weeks to finalize and therefore it is advisable to continue making payments on the old card till you receive the other card. A credit score of around 700 or more is a requirement for you to get a balance transfer credit card.
Settle balance within 0% introductory rate period
Be aware of when the 0% introductory rate ends so that you make arrangements to settle your debt before the period is over. Usually, the free introductory rate can last between 12 months and 21 months. When making payments always factor in the transfer fee of around 3% to 5% to the amount you owe. If you don’t settle the debts during the promotional period you may end up paying higher rates and the balance transfer will be meaningless.
Do not take the promotional purchase bait
After transferring the balance it is important to avoid making purchases using the credit card until you settle off the balance. Sometimes the balance transfer credit card can have promotional offers for making purchases but it important to avoid falling for the bait. Increasing the balance will make it difficult to pay off your transfer.
It is important to avoid laxity in making your monthly payments just because of the 0% promotional rate. Maintain the same amount you have been paying or more if you can so that you can settle the balance within the promotional period.
Rebecca White is chief editor at CreditRaters.com. Rebecca has an extensive amount of knowledge on financial subjects including short-term loans & debt consolidation in the UK and USA. Rebecca has wrote for many publishers such as Debt Secret, My Money, VL and more.