Many people have enjoyed the benefits of transferring their balances from expensive, high rate cards onto low rate or even interest free cards over recent years. Balance transfers have become an effective way to avoid paying costly interest charges on balances, and with both 0% cards and low rate life of balance transfers available there is something to suit most needs and circumstances.
The idea behind balance transfers is that you save money on the cost of interest, which on standard credit cards can be extremely high Your Reward Card activate . You therefore need to pick the right card for your needs based on your repayment habits. You will find two different types of balance transfer credit cards available, and this includes the 0% offer and the life of balance transfer card.
Actually transferring your balance is a very simple process. All you will need to do it provide the details of your existing credit card balances and account numbers to your new provider, and your new provider will arrange for those balances to be cleared through your new balance transfer card. Your old balances will then be transferred onto your new card, leaving you with just one convenient balance to deal with, on which you will be charged either no interest or a very low rate of interest. You need to make sure that the credit limit on your balance transfer card is high enough to accommodate the combined total of the balances that you are transferring. You also have limited time within which to transfer your balances, so make sure you check what this is and act within plenty of time.
0% balance transfer credit cards
With a these cards you can transfer the balances from your existing cards and enjoy a specified period of interest free credit, which means that you can effectively clear the balance without being hit by further interest charges – however, you have to clear the balance within the 0% period in order to benefit fully, as otherwise your remaining balance will accrue interest at the lender’s standard variable rate.
Most 0% balance transfer credit cards will charge a percentage of the amount being transferred to the card by way of a transfer fee, and this usually varies between 2-3% – this is something that you will need to check when you compare different 0% balance transfer credit cards.
Life of balance transfer credit cards
If you are concerned that you will not be able to clear your transferred balances within a set period then you may fare better with a life of balance transfer credit card. With these cards you transfer the balance in the same way, but rather than getting 0% on your transferred balance you are charged interest. However, the interest rate charged on the transferred balance is way lower than standard rates, and providing you pay at least the minimum amount requested each month you get to enjoy this low rate for the life of the transferred balance.