If you have accumulated debt on your credit card, balance transfers can be an enticing option. Balance transfer allows you to save money, although it is no secret that it can end up costlier than you want it to be. If done right, however, you can truly benefit from it. Here are some essential pieces of information that you need to know before you perform the big switch.

Introductory Period and Interest Rates

Most of the credit cards today offer affordable introductory interest rates for clients that wish to transfer their balance from one card to another. With such rate, the monthly charges will be reduced if not eliminated. Due to the absence of a monthly finance charge, you will find it easier to pay your balance.

The duration of the introductory period will depend on your chosen credit card company. However, this usually lasts for six to 12 months. If the company provides you with an extended introductory period, you will have more time to settle your balance without obtaining the complete finance charge.

The Lower the APR, the Better

It is significant that you look for the lowest possible annual percentage rate or APR. This is because the APR will increase after the preliminary rate expires. This should serve as a motivation for you to pay off your credit card balance sooner. Note that balance transfer APR is usually not the same as purchase APR, which defines the interest rate of the outstanding balances on acquisitions made using your credit card.

Choosing a New Card

As you shop for a new credit card, it is helpful that you opt for a card with lower interest rate than your previous one. You can use this new card to pay off your debts from your old card. For instance, if your debt sums up to $2,000 and your old interest rate is 13%, you are required to pay $347 monthly for up to six months to finally get rid of the debt. Meanwhile, if you transfer your balance to a card with 0% interest, you can save $77 since your payments will decrease to $334.

Consolidating Debts

You can make your financial life a lot simpler if you transfer your balances to a low interest card. This is a viable option, especially if you have maxed out several credit cards in the past and you cannot keep track of your payment dates. If you only have a single card that offers low to zero interest rate, you will never have to worry about accruing late fees and going through all your credit card statements at the end of the month.

Good Credit

In order for you to qualify for low interest balance transfer cards, you should maintain a good to excellent credit history. After the recession, these cards have become rarer, but now, they are again available. However, you have to have decent credit to get access to the best terms.

Bear in mind that the real benefit of a credit card balance transfer is that you can save cash over the long haul. This is only possible if you pay back your previous debts at a much lower interest rate.

Arianne Soco is a prolific writer. She writes about anything that catches her fancy. See her writings on the credit card niche at http://cardrewards.net/news or http://cardrewards.net.

Arianne Soco is a prolific writer. She writes about anything that catches her fancy. See her writings on the credit card niche at http://cardrewards.net/news or http://cardrewards.net.

Author Bio: Arianne Soco is a prolific writer. She writes about anything that catches her fancy. See her writings on the credit card niche at http://cardrewards.net/news or http://cardrewards.net.

Category: Finances
Keywords: credit card balance transfer, balance transfers, credit card