Transfer credit cards or balance transfer credit cards are a recent development in the history of credit cards.Suppose you are a credit card holder with a balance debt of $ 7000.Now you decide to switch to a new card.But you have a liability outstanding on the first card, your debt balance.The new company allows you to transfer your outstanding balance on the existing card to the new card.The new one is a balance transfer credit card.Suppose the credit limit of your new card is $ 25,000.Your balance with the old card is $ 7000.Now the credit limit will have a reduction to the extent of the balance amount.The credit limit of the new card will be $ 18,000.
Transfer credit cards are advantageous in many ways.Most of the cards allow you a very low or nil interest for the balance. Hence it will be beneficial for you in your debt management.As a matter of fact,these companies offer you a 0% transfer facility as means to woo you to leave your first card and take theirs.But this low or nil interest will be only for an introductory period of 3-6 months.Also, there may be some hidden costs.Hence it makes sense you look in to the terms and conditions if any hidden costs lurk behind the rosy face.Some companies charge some introductory fee or annual fee.But it is an advantage that you can save the interest of 16-18.
If you opt for a
Balance Transfer Credit Cards, first you have to apply to the card issuer stating your need of a balance transfer.Along with, you should obtain the credit statement from your card issuer and produce it to the new company.On due approval of your transfer application, the new card issuer will pay off the balance amount payable to the old card issuer. Then the amount paid by the new card issuer will be added to the debit of your new card.
After your submitting of application for balance transfer,it may take a couple of weeks for the transfer to take effect. During this intervening period your payment date may fall due which you may not take notice of.This lapse will have an adverse effect on your credit report.As such, you should ensure the remittance of the due sum by the stipulated time until the transfer is effected.
