Don’t Believe These 10 Balance Transfer Myths

May 14, 2019

By Sherry Keyles

If you are struggling with credit card debt, a balance transfer can help. Transferring your high-interest debt to a balance transfer credit card with an extended introductory 0% APR offer (typically range from 12-18 months) can save you money while enabling you to reduce your debt faster.

Balance transfer credit cards aren’t for everyone. It’s important for you to analyze your finances to determine if a balance transfer is your best option for eliminating debt. Do the math to figure how much you can afford to pay each month and how long it would take to pay off the debt. You want to ensure you can pay your balances before the 0% APR promotional period expires

If you do decide a balance transfer credit card is right for you, make sure you research the different offers available before applying. Review the terms and conditions of each balance transfer credit card offer to ensure you are getting the right card for your financial situation.

There is a lot of misinformation about balance transfer cards and how they can be used. To help you in selecting a balance transfer card, review these common myths about balance transfer credit cards along with the real facts.

All credit cards have balance transfer fees

While most credit card issuers do charge a balance transfer fee on the amount transferred (usually 3% or 5%), you can find a few cards with a lengthy 0% APR offer and the fee waived (usually for the first 45-60 days). The Chase Slate card and the Amex EveryDay® Credit Card both waive the fee on balance transfer made within 60 days of account opening. Many credit unions offer balance transfer cards without transfer fees but you need to be a member. You should read the terms and conditions to confirm how long the no fee period lasts and if there are any requirements you need to meet to have the fee waived.

A balance transfer will get you out of debt

The only way you can get out of debt is if you pay it off. A balance transfer credit card is a tool you can use to help you pay off the debt faster while avoiding high interest rates. You will still have to make monthly minimum payments as with any credit card. To get out of debt with a balance transfer, you need to ensure you pay off your debt before the 0% introductory APR offer expires. Otherwise, you’ll have to pay the standard APR, which would be around the current average of 24%.

A balance transfer reduces the principal you need to pay back.

Fact: A balance transfer can save you money long-term but you still need to pay back the amount you transferred. You’ll just do it without paying high interest rates for a certain period of time.

Balance Transfers are only for credit card debt

Depending on your card issuer, you may be able to transfer debt for home, auto and personal loans as well as store and gas cards. Read the terms and conditions to find out types of debt you are allowed to transfer. The issuer will provide checks to transfer your other debts to your balance transfer card.

Anyone can qualify for a 0% APR balance transfer card

Card issuers review your credit report before approving a credit card. Generally, if you have a very good or excellent credit score you are more likely to qualify for the best introductory offers. When you receive an offer, make sure you find out what credit scores are required before applying. If you don’t have the requisite score, it’s better to apply for a card, which will accept your score. If your score is too low to qualify for any 0% cards, consider taking time to work on your credit rating before applying.

Balance transfers don’t affect your credit score

How a balance transfer affects your score depends on a number of factors, including the total amount transferred and how many times you’ve transferred your balance in the past. Generally, opening a new credit card will not affect your credit score unless you continuously move your debt from card to card. If this is your first time transferring a balance and you are using the money saved on interest to pay off your debt faster, a balance transfer can have a positive impact on your credit score. Transferring a balance to a credit card with a higher limit can help reduce your credit utilization, which can improve your overall credit score.

You can stop making payments to your old card as soon as you request a balance transfer

Balance transfers can take up to two weeks (or longer) to be approved. Continue to make payments on your previous card until you receive confirmation the transfer is complete. Otherwise, you will incur fees for any missed payments.

Balances can be transferred from any credit card

Transferring balance between accounts with the same credit card issuer is usually prohibited. This also includes any companies affiliated with the issuer. Make sure you check any airline credit cards you have to determine the issuer.

You should cancel your previous credit card once balance transfer is completed

Assuming you aren’t paying an annual fee on your old credit card, it’s better to keep the account open even if you don’t plan to use it.  When you close a card, you lose its credit limit, which can raise your credit utilization. In addition, old credit cards increase your average length of credit history, which is another factor used in calculating your credit score.

Using your balance transfer card for purchases is a good idea

Even if your balance transfer credit card offers a 0% APR on purchases, you should avoid making any purchases with your card. You are trying to eliminate your debt and purchases will just put you further into debt and make it harder to pay it down before the 0% APR balance transfer period ends.

Related News

Capital One Journey Card for Students –

The Capital One Journey Student Credit Card is a credit card that is ideal for those with an average credit ...
Read More – Horizon Gold Credit Card Offer

The Horizon Gold card is a store credit card that requires very little information to get started. They run to ...
Read More

Chase World of Hyatt Credit Card –

With a small annual fee, $5,000 minimum credit access line, and free nights each year after opening your card, the ...
Read More