Balance transfer...

Credit balance transfer: Balance transfer helps to consolidate debts in a secure and legal manner. The credit card company transfers the balance to another low interest rate card or a new credit card could be availed of. There is certain basic paperwork and procedure of application required for a balance transfer.

A balance transfer can help to save money on interest charges that are applied to the existing credit card balance. The common interest rate offered by credit card companies for a balance transfer is zero percent. This rate is offered for a specific period of time. A balance transfer can improve your credit score temporarily. It can also get you a better interest rate, since it increases your available credit in relation to the debt amount. A request for a new credit card can adversely affects the credit score, if a new card is availed of more than once in every 6 months.

Balance transfer on credit cards: Almost every credit card company offers the ‘balance transfer’ facility. The ‘balance transfer’ facility in credit cards helps to identify debt solutions. The card usually comes with some additional perks, such as:

1. Longer grace period for payment.
2. No annual credit card fees.
3. Cash back on purchases.
4. Discounts (only from certain retailers)
5. Protection from identity theft.
6. Car insurance.

When the balance transfer is complete, the new credit card company sends a notice confirming the completion. The old card company also dispatches a zero balance billing statement. In case the statement is not received, call for verification and note the date, time and name of the executive who answered the call. Once the verification is over, you can cancel your old credit card.

Zero percent balance transfer credit cards: Some credit card companies have resorted to offering a low introductory, 0% APR or Annual Percentage Rate interest rate on balance transfers. This interest rate lasts for 6-12 months. You should strive to clear your outstanding balance within the time frame of the introductory offer. There are several 0 interest balance transfer credit cards available in the UK, like the Discover Platinum Card that offers 0 or no fee on purchases and balance transfers.

Balance transfer with a low interest rate: You should be aware of offers that flaunt balance transfer to a credit card, with a low interest rate.

• Choose a credit card limit that complements your current financial status. Transfer your hefty credit card balances to 0% credit cards only if you can pay the company before the introductory period ends.
• Be aware that some credit card companies charge 3% to 5% of the balance that is transferred.
• It takes almost 4-6 weeks to transfer the balance to a new credit card. During this time you need to continue making your minimum payments on the old card. A single payment default can result in a universal default clause in your new card agreement. This will have an adverse effect on the low introductory rate being offered to you by that credit card company.
• Before you transfer your credit card balance to a card with a low introductory rate, read through the offer carefully. Otherwise, you could end up paying an unexpected fee and a high interest rate.