Carrying that balance for a year will cost you $1020 at this interest rate. If you opt for 0% balance transfer to a new credit card, which has an introductory period of 1 year, then you have an entire year to pay off $6000, and you will just have to pay the transfer fee of 3% that would be 180$. This is how you would be saving on your interest amount.
While making the choice, be sure about the particulars like: This concept is mainly targeted to people with a high credit score, that means the amount that you can credit depends on your credit history, which should definitely have a high credit score. The company that is offering you the balance transfer will charge a fee, which could be a percentage of
the amount credited or a flat rate. There are certain restrictions, for instance, you may be charged interest on the items purchased with the new card.
So, one has to go through the fine print carefully, and it’s important to be aware of the terms and conditions before making the choice.
How to go about a balance transfer
1. Find and apply the card for which you will be transferring your balance. When you are making a choice remember to give attention to the 0%APR period.
2. Make the call to the respective customer service and in case you wish to transfer just a part of the amount, make sure you let them know how much money you want to transfer. If you don’t do this, then they will be under the assumption to transfer the entire balance amount.
After this, they will get in contact with your previous credit card holder and transfer the amount to the card you chose. You will be charged a transfer fee dictated by the issuer. This process usually will take two to three weeks to be completed, and see through that within that period you do not have any due payments, which will cost you unnecessary late fees.
3. Sit back and plan a budget to pay back within the introductory period, while the process is ongoing.
Featured Image: Depositphotos/© pressmaster
