How a Credit Card Balance Transfer Can Improve Debt Management
Did you know that a credit card balance transfer might be a good method for paying off your debt? Keep reading to learn more about what debt management strategists offer as the reasoning behind this and the benefits associated with balance transfers.
Debt Management Planners Support Credit Card Balance Transfers
Debt management planners suggest that a credit card balance transfer can be a safe option for paying off high interest debt because it amounts to essentially borrowing from low interest credit cards. However, transferring a balance is not a simple procedure. There are several aspects to consider or it could end up becoming a costly affair.
Per a new guideline issued on February 22, 2010, all credit card holders are required to maintain higher interest rate balances by making payments above the minimum level. Business analysts might consider it an additional burden on debtors but it will actually facilitate balance transfer pay off and allow card holders to pay less interest. So in a way, it is a win-win situation for credit card holders.
Choose a Good Credit Card for a Balance Transfer
Debt management counselors advise to check for certain things when choosing a balance transfer credit card, like the introductory rate, validity of the introductory period, post-promotional interest rate and balance transfer fee, if any. Also make sure to enquire about how you can qualify for an introductory interest rate if you opt for a particular credit card.
The Goal is to Save Money
The primary objective of a debt management solution is to save money, and a credit card balance transfer is no exception. The trick is to repay the entire balance of your credit card within the promotional interest rate period. This way you will make the most of the savings from the balance transfer.
Maintain a Healthy Credit Score
A credit card balance transfer might affect your credit score. A high credit balance indicates more debt and creates a negative impression among creditors. That’s why debt management counselors recommend doing anything you can to avoid a bad credit score.
Double-Check your Credit Card Balance Transfer
After you transfer your balance to a new credit card, it is recommended that you double-check to make sure the transfer was successful. If you have opted for a debt management plan (DMP), don’t forget to ask for a billing statement showing the transfer. If there is any mistake in the balance transfer, you can find out about it easily through the billing detail. It also will help you track any missing or delayed payment that could become a problem in your debt repayment later.
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