Top 4 Balance Transfer Credit Card Benefits

With all of the available credit cards that are out there these days, it can be hard to know which card is right for you. Balance transfer credit cards are a great option for you to consider as they can help you pay off debt faster while saving you money.

• Save money

  Everyone is looking for ways to save money and a balance transfer credit card could be the answer for you. By transferring your balances from high rate credit cards to a lower rate card, you will be paying less interest.

  Many balance transfer credit cards also offer introductory rates. Sometimes, these rates are as low as 0% for the first 6 months! This means you won’t have to pay any interest for the introductory period, which leads to huge savings!

  Here’s an example of the savings you could get when you take advantage of a balance transfer credit card. Let’s say you currently have $3,000 on a credit card with 24%APR. You decide to do a balance transfer to a card with 13%APR; this new card is also offering an introductory rate of 3% for 6 months. You will save $483just in the first year of the balance transfer!
  

• Pay off debt

  Balance transfers also help you pay off your debts faster. This is because you will have less debt to pay off. Sure, the balance is the same as with your existing card but because you will owe less in interest, you will owe less in the long run.

  One great way to pay off your debt quicker with the help of a balance transfer credit card is to continue making the same monthly payments that you are currently paying. You will see that your monthly minimum payment will be lower with the new lower rate. But if you keep paying the same minimum payment as you were before, you could shave years off the time that it takes to pay off the balance!
  

• Increase your buying power

  A new credit card will also boost your buying power. Balance transfer credit cards often have higher limits than a regular credit card. This means that you will have more credit available to you with your upcoming purchases. This is a valuable benefit if you plan on purchasing furniture, electronics, appliances or other big tag items in the near future. Just be sure to be responsible with that new limit!
  

• Increase your credit score

  Being responsible with your balance transfer credit card will also help you increase your credit score. Many people do not realize that credit scores take into consideration their debt-to-limit ratio. This is the percentage of your credit card limits that you are currently using. In other words, the higher your balances, the more it affects your score.

  As mentioned previously, transferring your balances to a lower rate card will help you pay off your debt quicker. This will automatically help you boost your credit score. This is a good thing, especially if you have your eye on a new ride or are in the market for a new house. Every little thing helps when it comes to your credit and future interest rates.