A credit card transfer is one of the best ways to get rid of a debt laden card. Many companies know how attractive the prospect can be to people with debt, hence the increasing number of 0% APR offers. But there are several things you need to be aware of before making a transfer.
How much is the Balance Transfer Fee?
Check if there is a fee for the transfer balance. Many companies do impose charges, but the amount varies. If you cannot find a company that does not charge a balance transfer fee, look for those with cap amounts instead of the unlimited fee which are based on the percentage of transfer.
Check the Rate after the 0% Offer Ends
Find out how much the rate will be after the 0% introductory rate expires. If the rate is high, you have to judge if you can make the payments for the duration of the 0% offer.
You should also check for a grace period, annual fees and miscellaneous charges. Pay close attention to the penalties for late payments. In some companies, you will be made to pay at the rate they will impose after the 0% APR expires.
Conduct Inquiries before Making Credit Card Transfers
Ask how much the minimum payment is if there is one. Ask if late or missed payments will void the deal. You should also ask if the 0% is applicable to all purchases or just the new ones.
There are many ways to reach company representatives; email, phone calls, visiting the nearest office etc. List down all the questions you can think of. If the answers are satisfactory, you can make the transfer.
How to Close Your Old Card Account
Before making the transfer, get a copy of your bill, the current balance, account number and the current card’s agreement documents. Call the customer service and ask how the account can be closed.To make the transfer, you need to fill out a transfer form.
You must also provide info about your current balance. Wait for your new credit card to notify you of the transfer completion. Next, call your old company and verify this information.
Kindly ask your old credit card company to issue a zero balance billing statement. Close the account after you get this bill. Make certain the company informs credit bureaus of the transfer.
Tips
If the rate to be imposed after the 0% is high, do not use the card for anything other than the balance transfer. Do your research before making a transfer. Go to the credit card website and modify the settings so payments are automatic.
Even on 0% cards, failure or missing a single payment can result in large penalties. Never apply for a credit card until you know the terms and conditions inside out.
A credit card transfer can reduce debts and make it easier to make payments. But just like other financial tools, you need to be aware of the potential risks so you can exercise better judgment.
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