Transferring balances from a high-interest credit card to a low-interest one can be a valuable tool in managing personal debt. If you possess multiple credit cards with high interest rates, consider consolidating the balances onto one card. If you have good credit, it's possible to find credit cards with short-term 0 percent interest rates for transfers or low rates. Fees and rates are just some factors to consider when determining how to apply for a credit card balance transfer.
Part One of Two:
Finding a Balance Transfer Credit CardEdit
1Compare balance transfer credit cards. A balance transfer credit card is one that will take a transfer from an old credit card, which is the only way you can use one credit card to pay off another. However, you want to get the best deal you can on your new credit card.
- Look for 0 percent or low APR rates. These types of credit cards have an introductory rate that is very good, which can allow you to pay off your debt without interest.
- Pay attention to how long the introductory rate lasts. By law, it must last 6 months, but many companies will push it to a year or a year and a half. You want the longest period you can find.
- Check whether the introductory rate is applied to just the transfer or new purchases as well.
- One way to compare cards is to use a credit card comparing site, such as Credit Karma.
2Read the fine print. The interest rate isn't the only thing you need to look at. You may also be slapped with a transfer fee or an annual fee. In addition, you may have to make a minimum monthly payment or be charged a fee. All of these aspects contribute to how good the card is.
- Also, consider the rates after the introductory period is up. While it's best to pay it off if you can, you don't want to be paying exorbitant rates if you aren't able to pay it off in time.
3Look at your credit rating. Often, the best deals are offered to those with the best credit. If you have a credit score of 750 or above, you'll get the best deals. Below that, you may still get a good deal, but not as good as someone with better credit.
- In other words, you need to make sure that you adjust your expectations. You may not get the first offer you see, or you may be offered something less.
- On the other hand, paying off some of your debt may help to improve your rating.
4Consider the limit. When looking at credit cards, most will have a specific limit, though often that is based on your credit rating as well. Nonetheless, you need to make sure that your new card will be able to accept all the debt from your old card and still fall under the limit, along with any transfer fees.Advertisement
Part Two of Two:
Applying for a CardEdit
1Find the application. Once you pick a credit card, find the application on that company's website. If you're using a credit card comparison site, it will often have a "Apply Now" button that will take you to the application on the credit card company's site.
2Fill in your biographical information. You will need to fill in some basic biographical information, such as your name, your address, date of birth, and your Social Security number. You'll also need other contact information, such as your phone number and email.
- The credit card company needs to make sure you are you, so no one else is able to take out a card in your name. It's also to stop one person from taking out multiple cards under different names.
- In addition, this information gives them what they need to check your credit score.
3Fill in your financial information. You also need to fill in your financial information. For instance, you will need to offer your annual income. You will also need to fill in where that income comes from, such as employment or student income.
4Check the boxes you need. Most applications will have a place to check if you want to transfer balances. When you transfer balances, you'll need to put in the information for your old credit card so the new company knows who to contact to transfer balances.
5Submit your application. Once you have all your information on the form, it's time to submit the application. Check it over one more time to make sure you have everything correct, as you don't want to have to correct any mistakes later, then hit the button.
6Wait on approval. Often, you will get an instant offer from the company, meaning you will be approved or not approved within 5 minutes of hitting the button. However, keep in mind that even if you are approved, you may not get the rate you hoped for.
- If you don't like the rate, you can choose not to activate the card or call and cancel the application. Then, you can apply to a different card.
- However, if you apply to too many credit cards in a short period, it can affect your credit rating.
7Close old accounts. Once the transfer is complete, contact your old credit card company to make sure the card is closed down. You want to avoid unwanted charges, service fees, and member fees. Of course, you'll need to pay off any remaining balances first, such as any interest fees that happened in the time you were transferring.
- Another option is to keep the old account open, but to only make small charges on it. Each month, pay it off completely. This process can help improve your credit rating.
8Make a plan to pay off your card. There's no point in transferring your card if you can't pay at least part of it off during the period you have a good rate. Look at how much you owe, and divide it between the months you have on the good rate. Try to make that payment each month to pay off the card.
- In addition, your new card will likely require you to make monthly payments, so make sure you are at least paying the minimum.