How to Make Balance Transfers Work
A credit card balance transfer is when you take the balance you have accumulated on one credit card and move it to another credit card. The key to making credit card balance transfers work for you is to avoid paying interest. Interest is how the credit card companies make their money and how you get behind financially.
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Instructions
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Collect all your credit card statements that list the amounts you owe. Note the available balance on each open card you have.
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Call each credit card company, or go online to see if there are balance transfer options for any card you have open. If there are none, it is time to complete credit applications. Either go online to new credit card companies to apply or collect a few credit applications from your mailbox. Many times, those credit card offers that you throw away include a 0 percent balance transfer option. If you do not have Internet access or any paper applications, you can apply with any credit card company over the phone.
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Each credit card company will charge you a 3 percent fee, or more, to transfer a balance, so remember--this process is not free. Usually, you can transfer your balance for either 0 percent interest or an interest rate significantly lower than your current rate. If you are on the phone with the credit card company, ask to speak to an operator about transferring all your balances to one card. If on the computer, click the "balance transfer" link on your account page.
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Once you have transferred your balances, make sure you begin to pay them off as soon as possible. The savings in interest rate are usually time sensitive. So, the sooner you pay off the balances, the better.
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Tips & Warnings
Check rates. If you have more than one open card, compare the balance transfer rates and fees to find the lowest rates and fees. When you call the credit card company, tell the company what rates its competitors are charging and see if it will get you a lower rate to win your business.
It is best to not run up credit card balances. Wisely using credit cards means paying off the balance in full each month.
