If you find yourself paying high-interest rates, you might not think that there’s any hope left for you when it comes to making it more affordable. However, that’s not the case. Balance transfer credit cards could offer you the opportunity to lock in lower or no interest rates as well as encourage you to pay off the balance of your other credit cards faster.
How Balance Transfer Credit Cards Work
For those who have multiple credit cards and/or high-interest rates, this could be a solid debt repayment strategy worth embracing. You will have to apply for a balance transfer credit card just like you did with your other cards and make yourself aware of the terms and conditions.
Keep in mind that by going this route, your credit score could drop due to decreasing your number of credit card accounts. However, if you have a sound strategy in place that keeps your accounts open while getting your debt under control, it could ultimately lead you to a higher credit score.
Most of these types of cards will come with 0% interest and no annual fees, making it a great option for saving money (since high-interest rates could cost you over $1,000 annually). As far as transferring the balance, you just need your account number to do so (or you can use your credit card itself).
Is this truly a beneficial opportunity to pay off debt?
With so many options out there when it comes to getting new lines of credit, the options can seem rather confusing. In order to help make light of the situation, the top benefits of credit cards used for balance transfers have been explained below.
· An additional line of credit being paid off in time could boost your score.
The basics of your credit score includes how many accounts you have that you’re keeping up with payments on. By using a balance transfer credit card in conjunction with your other credit accounts, you’ll be able to increase this number, thus boosting your score as long as you stay on top of payments.
· Consolidating your debt into one place makes it easier to pay off.
Having to keep track of multiple credit cards can be a pain, and it could also lead one down the road of credit devastation. By transferring your outstanding balances to this type of credit card, you’ll have one monthly payment for all of your outstanding credit card balances. Not only will this help you in terms of being reported as paid, but it helps makes life a lot less complicated.
· In most cases, you’ll save on fees as well as interest with balance transfer credit cards.
Since most balance transfer cards come with a 0% interest rate, you can consolidate all of your debts into one easy-to-remember plan. Take it to the next level by setting up auto-pay to ensure that it really does help your credit score instead of ruin it.
Just like with any other type of credit card, it’s important to have a sound debt repayment strategy in place so that you can make the most out of this opportunity. Also, read the fine print, and don’t let yourself become surprised by limitations that you may not have made yourself aware of.