credit card debt is known in the United States. With a revolving debt, which includes credit cards, rising to $ 5.8 billion to $ 8.9 last year, according to the Federal Reserve, it is clear that Americans need help paying their debt. The key to pay the credit card is to try and have an interest rate that is as low as possible - this way you can focus on the final payment, and not interest. Many people have credit cards with purchase APRs ranging from 13% to 25%, which means they pay a lot of extra money each month if they do not pay their bill in full. That's where a balance transfer can help you not only save money but also give you more chance to repay your debt.
What is a balance transfer?
In other words, a balance transfer is when you transfer the balance of partial or complete a credit card to another credit card. To be clear, transfer your balance to a card with a 20% APR on a card with a 15% APR might not be worth it, especially considering most of the 3% charge cards (usually with a minimum of $ 5) of the total balance of your transfer. However, if you qualify for a credit card with 0% introductory APR on balance transfers, you could save a lot of money.
Here's an example: Say you have $ 15,000 of credit card debt on one credit card with a 15% APR. If you are able to repay the balance in full in 12 months by paying the same amount each month, you earn about $ 1,250 in interest charges. On the other hand, if you decided to transfer your $ 15,000 balance on a credit card with a 12 months 0% Intro APR on balance transfers, you should pay only $ 450, assuming that there is a charge transfer balance of 3%. This represents a more than $ 800 economy. Not only that, but some credit cards allow you to transfer your balance for free!
Note that if you have a fairly large amount of credit card debt, a personal loan may be the best option for you. Use our guide to help you decide.
How does a balance transfer?
Once you have applied and have been accepted for a new credit card, you'll need to initiate a balance transfer from your old card to the new one. You can do this either online or by calling the issuer of the new card. Some cards, like Chase Slate, allow you to enter your your old card balance transfer information on the page in the application so that it will be launched immediately if you are approved. To transfer your balance to a new card, you will need the number of your old card, the name of the bank and the amount you want to transfer. Be sure to verify that the transfer has gone through by checking the two accounts, either online or by phone. The balance transfer can take as long as seven days to complete, so it is still important to make payments on your old card until the declaration means that the transfer was made.
Best credit cards for a balance transfer
There are a number of credit cards that are designed for balance transfers. Here are four of the best options:
The best balance transfer card: Chase Slate
The longest 0% APR Citi Card Simplicity
best balance transfer card with rewards Citi card Double Cash
Runner up: Discover Card - Balance Transfer
lowest long-term April balance transfer card: Barclaycard Ring MasterCard
Want to know more about balance transfers? Use our balance transfer calculator to see how much money you could save and find the best card for your needs.
Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and has not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but the terms and conditions of card can change at any time. This site may be compensated by the sending credit card affiliate program.