Transfer Balances to Lower APR Credit Cards

In today's economy, it's easy to get into a lot of credit card debt. In order to avoid spending too much money on interest, transfer balances to lower APR cards. It's an easy way to consolidate debt. Learn how to transfer balances to save money.

Credit cards all come with different APRs or Annual Percentage Rates. Depending on the issuing bank and the particular offer, interest rates can be as high as 24.99% and as low as 0% - at least for an introductory rate. Debt can be drastically reduced by making balance transfers.

The Easiest Way to Consolidate Debt

There are a lot of consolidation loans available in today's world. Many of them require a fair amount of credit, however, which can be difficult. Instead of contacting a third party to get involved, you can do a debt consolidation loan through a credit card.

Line up all of your credit cards with the balance and the APR that you're paying next to each balance. The credit card with the highest APR needs to be paid off first. Otherwise you will continue paying that balance very slowly. The reason for this is because the high APR leads to a lot interest fees that get added to the balance every month.

The highest APR balance can be transferred to a credit card with a lower APR. This can be done on a pre-existing card or on a new card offer.

How to Transfer Balances Effectively

When it comes to looking at transferring balances, it's important to look at a few different things. This includes finding out what the available credit is on the lower APR cards, what the new APR is, and what the balance transfer fees are.

A balance can only be made if there is enough available credit on the lower APR card. If all of your cards are currently maxed out or they all have the same APR, you may want to consider applying for another credit card.

The new APR should be at least a few percentage points lower than the current APR. Otherwise you're not improving the situation. Ideally, you should look for a card that has a balance transfer rate that is very low for at least 6 months.

Finally, find out what the balance transfer fees are. Many banks charge a percentage of the total balance in order to transfer the balance. Depending on the card and the balance, it's important to calculate the fees to see if it's worth spending the extra money.

If you are doing a balance transfer to a card that you already have, it's important to wait for a period where they are offering balance transfers. This isn't something you can do at all times. Cards will go through certain promotional periods where they allow it.

Otherwise, you can apply for a new card. There is usually an introductory period of a few months where you can do as many balance transfers as you want. As long as you don't go over your credit line, you can transfer the balances as you see fit. In some cases, there may be a great deal in place, such as a 0% APR or no fees to make the transfer as well.

Saving Money with Debt Consolidation

When you transfer balances to the lower APR credit cards, you are able to pay off your debt faster. You may end up saving a significant amount of money each month just by reducing the APR. This extra money can then be applied directly to the balance. A credit card that would ordinarily take you 8 years to pay off may now be paid off in 5 or less.

Debt consolidation is important. If you don't want to take out a traditional consolidation loan, you still have options. By looking for lower APR cards, you control your destiny. Look at your pre-existing cards and shop credit card offers with low APRs and high enough credit limits to handle your debt. This will ensure you have the ability to lower your APRs and consolidate your debt effectively.

Final Word

By learning how to calculate interest rates and make balance transfers, you can pay off debt faster. Without getting the APR down lower, you may be paying off debt for many years to come. Luckily, there are better alternatives out there.