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Read the fine print to know the credit card balance transfer rules

Various Credit Card Balance Transfer Rules

by / 0 Comments / Mar 04, 2015

Balance transfers are easy to do once you understand the credit card balance transfer rules. One way to manage your credit card debt is to transfer what you owe on a high-interest rate credit card to a card with a low interest rate or, even better, one that doesn’t charge any interest at all. Some balance transfers on credit cards have a 0 interest rate for a certain amount of time, usually anywhere from 6 to 18 months. Transferring your balance isn’t difficult to do, but there are some elements you need to consider before you make the transaction.

How It Works : Credit Card Balance Transfer Rules

After you researched the various credit card deals available, picked the best one for you, applied for the card and received approval for a balance transfer card, you are ready to begin. Simply contact the credit card issuer you are transferring your balance to and say that you want to make a balance transfer. You’ll need to give your old account information to the new card issuer and state how much you want to transfer.

How Long It Takes

It can take between 3 and 10 days for the transfer to post, sometimes as much as 30 days. Meanwhile, make sure you are still making at least the minimum payment on your old card. You need to continue to make payments on your old card until you receive confirmation that your old card issuer received the transfer payment from your new card issuer.

Methods for Transferring Your Balance

You can request a balance transfer online, over the phone or by using balance transfer checks.

  • Transferring your balance online — You can verify for yourself that all the information, such as your personal information and your account numbers, is correct.
  • Speaking with a customer service representative over the phone — This is a good way to transfer your balance. However, there is a chance that the representative might mistype some of your information, which would add to the processing time if that happened.
  • Balance transfer check — You might receive a balance transfer check in the mail because you have a credit card. You can use this check to pay off a balance you might have on another credit card. The big advantage to balance transfer checks is the convenience. In fact, many people call them “convenience checks.” However, don’t confuse them with cash advance checks, which are typically what the term “convenience check” is for. Cash advance checks usually have a high interest rate, and balance transfer checks usually have a low interest rate.

Using the Old Card

Once your new credit card issuer pays the transfer payment, it’s not a good idea to start using the old card again just because you have new available credit opened. You might wind up in a debt situation that you can’t handle. After all, you haven’t gotten rid of the transfer amount; you just transferred it to a different card.

However, you should keep the old card open (unless you can’t trust yourself not to overspend on it). If you keep it open and don’t use it or use it only for small purchases, such as gas, which you can pay off in full each month, your credit score will rise. You will have available credit that you are not using. Credit utilization is the second biggest factor the credit bureaus use when figuring your credit score. (Paying your bills on time is the biggest factor.)

About the Author

Laura Agadoni has a background in credit union marketing, and her articles appear in various financial publications such as The Houston Chronicle's small business section, The Motley Fool, RISE Blog, The Penny Hoarder, San Francisco Gate's real estate section, Zacks, Opposing Views, Arizona Central's small business section and The Nest's budgeting money section. www.lauraagadoni.com

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