Credit Card balance transfers 

You've had a credit card for a while. Maybe it was even your first credit card as you started getting on your feet. Slowly you built up a moderate balance, nothing to be too concerned about but enough that you cannot simply pay it back if you wanted to.

Since the card is your first card, or maybe because you used to have bad credit and were slowly building it back, you decide it is time to upgrade yourself to a new credit card and wish to do a credit card balance transfer, so that you can pay off your credit card debt using the new card only as well as the hopefully lower interest rates.

 
Benefits of Credit Card Balance Transfers
Transferring your credit card balance from once card to another is not always a bad thing. In fact, it can be a potentially great way to save some money on your monthly bills. Many credit card companies offer lower rates on balance transfers, and if you had maxed out your previous credit card but your new credit card is going to have a higher limit, it can even improve your credit score .

Unlike many of the things credit cards do to try to get as much money from you as they can, credit card balance transfers have the potential to be very helpful.

Risks and Downsides of Credit Card Balance Transfers
Just because they are beneficial does not mean you should transfer your balances often, however. There are some reasons to not transfer a balance:

 

• First, if the card you are transferring it to already has a lot of money on it, you risk filling up a large percentage of the limit which could lower a credit score.
• You should never open a new credit card to transfer a balance just so you can skip a payment. This is a potentially dangerous practice.
• Balance transfers should really only be done once, maybe twice in an entire decade, because every time you open up a new credit card your credit score goes down, and you do not want to open up new credit cards all the time simply to take advantage of their lower balance transfer interest rate.

• The card you are transferring the balance to should have an overall lower interest rate than the card you are transferring it from, because eventually the introductory APR will run out and you want to make sure that the interest rate you are paying is still less than you were paying previously.

That said, if you have good credit and have a credit card with a better APR, a good limit and few penalties, a balance transfer may be a good thing to do for both your credit score and your wallet.




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