Have the regular minimum payment on your card ready to submit in case there’s a delay in the transfer. If you miss a payment on many of these cards, the 0% APR can suddenly vanish and the issuer might start charging you the regular double-digit APR. Basically, you lose the main benefit of the card and the reason you got it in the first place. Some issuers can even go as far as charging you interest retroactively from the time you opened the card. Therefore, make sure to never miss a payment on your balance transfer credit card. Unfortunately, credit card companies don’t offer these too-good-to-be-true cards out of the goodness of their hearts. If you’re not disciplined or misunderstand how balance transfers work, you could potentially end up in more debt than you started with.
Thousands of Americans turn to balance transfer cards every year to get a handle on their credit card debt. When you begin using your balance transfer card as a regular credit card, you also increase the risk of not paying down your transferred balance within the introductory period. Not only are you increasing the amount you’ll need to pay each month to bring your balance down to zero, but you’re making it harder to track your balance transfer debt from your new purchases.
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- These introductory periods often last about 12 months — though some go up to 21 months.
- Plus, instead of paying multiple creditors on multiple due dates, consolidating all of your balances onto one card means you only have to keep track of one payment a month.
- People who take advantage of balance transfers sometimes forget that the 0% APR has a time limit.
- It may sound like a good idea to keep transferring your balance to a new card to avoid paying interest altogether.
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Busting Common Myths About Discover Card’s Acceptance
You should also educate yourself about some of the pitfalls of balance transfers before applying for a card. However, once you made a new purchase with that card, interest would begin to accrue on that purchase alone, and not the balance you transferred. While balance transfers can help you save on interest on existing balances, it’s common to get charged a fee for transferring a balance. If you’re a member but don’t have a Navy Federal Credit Card, check out our credit card offers and apply for a card that fits your needs. When completing the application, simply select the Balance Transfer option.
As long as you maintain healthy financial habits by consistently paying the minimum payment each month (if not more), you will be on track to pay down your balance interest-free. This will depend on your available credit and offers available, but don’t count on being able to repeatedly roll over debt to another balance transfer offer. High credit utilization could lower your credit score and make it harder to qualify for additional credit offers (including balance transfers).
Can I Use A Balance Transfer Card To Make Purchases?
The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. You can avoid interest on new purchases you make if you pay your entire balance in full each month. This means unless you have a 0% introductory purchase APR, you will pay interest on new purchases if you do not pay the balances you transfer under the offer in full by the first payment due date. Learn why your credit score may not change when you pay bills on time & pay off credit card balances. If you want to qualify for one, you need a good to excellent credit score.
- And always be sure to review the balance transfer fee, which can range from 3% to 5% of the amount you’ve transferred, as well as payment deadlines to avoid late charges.
- Once you’ve transferred your debt from an old card, consider keeping the card open — if you can avoid the temptation of spending money on the card.
- Moving outstanding debt on one credit card to another card—usually a new one—is a balance transfer.
- The chances of getting approved for these cards are quite good if you have a good credit score.
Power its potential with one of our business credit cards, like Ink Business Preferred℠, Ink Business Unlimited℠ or Ink Business Cash℠. Enjoy the convenience of earning cash back with Chase Freedom® or Chase Freedom Unlimited®. Sign in to activate a Chase card, view your free credit score, redeem Ultimate Rewards® and more. Balance transfers can have positive credit score effects if you open a single new card with a low APR and make an effort to reduce your debt. The introductory interest rate is important, but it’s not the only factor to consider. If you can’t pay off the balance by the end of the intro period, you’ll be stuck with another high APR.
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You might also lower your overall monthly payments and turn multiple bills into one easy payment. Before you begin putting new charges on a balance transfer credit card, be sure to read the terms and conditions to understand the consequences of making new purchases. It depends on the balance you’ve transferred, the amount you pay each month and how your credit issuer applies your payments to your purchase and balance transfer balances. If you are only paying the minimum due each month, you may not be able to repay this balance before the introductory period expires, which might mean more debt. If you transfer balances between your existing cards, your credit score likely won’t be impacted, but applying for any credit card can have an impact on your credit (either good or bad).
A balance transfer credit card can be a useful tool if you’re looking to consolidate and pay down high-interest debt. It can help you save on interest, while boosting your credit score, if you pay on time and in full before the end of the balance transfer period. However, carefully weigh the pros and cons, because a balance transfer is not right for everyone. You may decide it is worth considering other options if you have poor credit or mounting debt.
With a little discipline and some research, you can use a balance transfer credit card to get closer to being debt-free. If you want to close a credit card account after a balance transfer, contact the creditor to do so. But you may want to keep the card open, as closing cards has the potential to negatively impact your credit rating.