Get balance transfer tips to help save on interest payments
Lowering your credit card interest rate can be a practical way to help get your credit card debt under control. That’s where a balance transfer comes into play. By shifting your credit card debt from several high interest cards to one with a lower rate, you could pay off your balance faster, and keep better track of your debt.
Many cards offer special introductory annual percentage rates (APRs) for a balance transfer. (Hint: If you have a pristine credit score, you may qualify for a lower introductory rate.) Move your balance from a higher rate card to one with a low introductory rate and you’ll pocket major savings. Just remember that these rates are “introductory”—they don’t last forever. Your best strategy is to pay off your balance before the regular rate (your bank may refer to it as a standard rate) kicks in.
Here are some balance transfer tips to help you make the most of a low introductory rate offer.
Have a solid credit score. The higher your credit score, the better your chances of obtaining a low-rate balance transfer offer. Learn more about your credit score here.
Look for a long introductory period. The initial rate you’re offered on a balance transfer deal is not permanent; typically, it lasts for six months to a year. To look for introductory APR offers, click here.
Managing Credit Tip #12
Did you know that 35% of your FICO score is based on your payment history? So, know your payment due dates and pay your bills on time, every time.
Factor in the regular rate. Depending on the size of your credit card debt, you may be able to pay it all off while enjoying the low introductory rate. But if you think you’ll still be carrying a balance once the initial rate expires, you need to know beforehand what your “regular” rate will be.
Evaluate the transfer fee. You will typically be required to pay up to 4% of the transferred amount upfront or a minimum of $10 (the amount appears on your first statement). On a $5,000 balance transfer, that’s a $200 fee. Factor this fee into your calculations to determine if you’ll save money over the long run. The savings from the lower interest rate will often be more than the cost of the transfer fee.
Keep payments current on your old card. Once you apply for a balance transfer, it can take two weeks or more for the transfer to complete. During this period, don’t fall behind on your existing credit card payments.
What's next? Your enhanced Bank of America credit card statement
