If you’re wondering how to do a balance transfer, you are not alone. I started Smart Balance Transfers in 2007 because visitors to my other websites were bombarding me with balance transfer questions and I wanted to put out as much information about how to do a balance transfer as possible.
As you may already know, 0% balance transfers are a very easy way to stop interest from piling up and to reduce the time it takes to get out of credit card debt. Here, I’ll show you how to do balance transfers the right way so you can maximize your savings.
1.) Select a good balance transfer credit card: This is the most important step in the balance transfer process. It is also the most difficult. Throughout Smart Balance Transfers, I provide tips to help you find the best balance transfer cards. Here, I will be brief: look for a card that offers a 0% rate for at least 12 months that is issued by a good credit card company you do not have an account with. (Balance Transfer Tip: You can transfer balances from one bank’s Visa or MasterCard to another Visa or MasterCard issued by a different company, but not between cards from the same bank.)
2.) Apply Online, but don’t transfer your balances online: Applying online for a balance transfer credit card takes about five to ten minutes. Some companies let you transfer balances with your application. If you want to do a balance transfer correctly, I advise against doing this.
Why? When you submit a credit card application online, by phone, or through the mail, you often do not know what your long term interest rate will be and, in some cases, how long your 0% rate will last. Credit card companies often advertise multiple rates, but only give the lowest rates to applicants with the best credit. To prevent getting trapped by a card that doesn’t deliver on its promises, I strongly advise waiting until you can review the card that arrives in the mail.
Okay, now that you know how to find a good balance transfer card, here are some tips to help you maximize your savings.
3.) Transfer balances with the highest interest rates: If you do not get a credit limit that is high enough to cover your total balances, find cards with the highest interest rates and transfer those to your new 0% balance transfer card.
Some people might tell you to get rid of cards with low balances so you can be done with them. Ignore this advice. If you want to do a balance transfer correctly, then you want to focus on saving the most money. That means transferring balances with the highest interest rates.
4.) Keep an eye on your old credit cards: Once you’ve transferred your balances, it is important to keep an eye on your old credit card bills. It can take up to one month for a balance transfer to clear, so you may have to make one more payment. If this leaves you with a credit on the old card, call and request a check.
Lastly, there is probably a good chance you racked up interest on the cards you did balance transfers from during the previous billing cycle. This means you may still owe some money when your next statement arrives. Make sure you get this paid to avoid late fees.
Hopefully, the tips I’ve outlined above have shown you how to do a balance transfer the right way. If you’re ready to get started, you can compare cards and apply online in the 0% APR Balance Transfer section of this site.