How to Transfer a Balance to a New Credit Card
If your old credit card has a high interest rate and you have good credit, consider opening a new credit card and doing a balance transfer. Transferring a high credit card balance to a new card can save you money on interest fees and overage charges, if you focus on paying down your current balance and avoid using your new credit card for further purchases.
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Instructions
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Send in the minimum payment to your old credit card company when you receive your monthly bill.
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Compare several credit card plans to find the new card that will best fit your needs. See "Resources" for more information.
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Apply for your new credit card and receive an approval from your new credit card company.
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Fill out the balance transfer form. This step will vary depending on what company you are applying with-most credit card companies will let you fill out and submit a balance transfer form online. Occasionally, you may run into a company that will ask you to fill out a paper form and mail it in.
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Continue to make the minimum payments on your old card until you receive notice of a successful balance transfer from your new credit card company.
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Contact your old credit card company by phone to make certain they have received the information that you have transferred your balance to another company. Note the time and date of the call, as well as the full name of the person you spoke with.
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Watch for a billing statement from your old credit card company that lists your account balance as zero.
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Decide whether or not to cancel your old credit card. See "Tips" for further information.
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Begin making regular, timely payments on your new credit card.
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Tips & Warnings
If you are trying to build your credit score, keep your old card and use it very occasionally for small purchases. Pay these purchases off in full every month.
Your interest rate is subject to change, particularly if you are repeatedly late with payments. Always pay your credit card bill on time and make at least the minimum payment to avoid damaging your credit and increasing your interest rate.
Introductory rates typically last for six to twelve months, after which the interest rate on your new card will default to its actual setting. Before you apply for a new card, read the fine print to find out what your APR will be after the introductory period is over.
If you plan to make purchases with your new card as well as do a balance transfer, find out if the length of your card's introductory rate varies depending on whether you're using it to pay off your balance transfer or new purchases. Some cards will have a 12 month introductory rate for balance transfers, for example, but the introductory rate will only be good for 6 months on new purchases.
Credit card balance transfers can be subject to fees. Make sure you understand whether you will have to pay fees before you agree to transfer a balance.
References
Resources
- Photo Credit credit card image by Christopher Hall from Fotolia.com
