What should I know about the balance of balance?
The process of converting the total amount due to a credit card to another revolving debt tool is called the balance of balance. This process allows card holders to use the competition offer with a lower interest rate. Balance transfers are available from all credit card publishers and are commonly used by more credit card balances per credit card.
When a credit card debt is moved to a long -term debt tool such as a loan line or a personal loan, it is called debt consolidation. More credit cards and other debts are combined into one debt, usually with a lower interest rate and a fixed monthly payment and deadline.
Interest fees on credit cards are calculated by composition. Interest is calculated per month using the previous month balance and multiplied this amount by an interest rate provided in the Credit Card Agreement. The interest value is added to the amount due.
next month's interest is calculated again using the new remainingTKU, which increased with a lot of interest. Interest composition means you pay interest on interest. By moving the balance from one card to another card with lower interest, your monthly minimum payment is smaller and the amount of interest paid for each period is smaller.
For example, if you have a $ 10,000 USD (USD) balance on your credit card and pay 10% interest, monthly interest added to your credit card is $ 81.90. If the interest rate was 5%, the interest was $ 42.16. Within 6 months you would save $ 252.96 in interest fees.
There are two critical details that you must be aware of the balance of balance; Introductory or promotional interest rates and loan management. Take the time and read the new credit card agreement carefully. Look for anything that men 'promotion' or "introductory". The lower interest rate is usually the initial rate and valid for a limited period of time, from 3 to 6 months. After this period, the interest rateThe rate increases, check what this rate will be, and compared to your current rate.
Balance Transfers on a lower interest card are a good way to make a deeper impact on your debt, but only if you are able to make significant payments during the initial period. In order to use a lower rate, the entire balance must be repaid in the last month of promotion and the balance for the next period also paid off in full.
If you convert the balance on a credit card to another credit card with a lower interest rate, cancel the first card. By temptation is to use this card and get deeper into the debt. Now you have two cards, with two sets of minimum payments, no payment makes any significant dent in your total debt.
The only way to get in advance when using Balance as a debt management tool to use a large discipline for your expenditure and repayment plan. Organize the balance of balance by contacting the credit card you want to move the balance and discussionoverstate about their process. Make sure it is not considered to be a cash deposit, because the interest rate is much higher and is enhanced instead of the moon. Ask any fees associated with this request and when it will be processed.
provide them with the total amount and credit card number. With this information, it issues a credit card with a lower interest rate to pay the old credit card for the total amount out of the total amount, thus completing the transfer balance.