If you have poor credit and have not paid off your credit cards in a long time, a balance transfer credit card can be an option for you. This type of credit card allows for you to transfer your existing balance to a new account at low interest rates during the initial period. Any balance not paid in full will be subject to a higher interest rate after the intro period.
APR introductory low
If you're trying to pay off a large balance, low introductory APR balance transfer credit cards are a great option. The cards come with a low balance transfer rate and no annual fee. These cards can also offer rewards programs, which could result in cash back over the life of the account.
To determine if you are eligible for a low APR balance transfer credit card, you can check your credit score. If your credit score is below 580, it's considered "poor". Applying for a low APR balance transfer credit card should take into account the promotional period, as well the APR.
No interest-free period
When choosing a balance transfer credit card, you should consider a few different factors. You should consider whether the card will offer an interest-free period. You could end up paying more for the card than you intended. You should also pay attention to the credit limit of the card.
The credit score of your applicant will determine whether you are eligible for a balance transfer account. Issuers typically prefer applicants with good credit as it translates into longer interest-free periods and lower interest rates. Credit score is a key factor in determining the maximum amount of debt that you can transfer on to a new account. This limit can be fixed in dollar amounts or percentages of your total limit. Although each case is different, it's generally true that credit card companies will offer less to you the lower your credit score.
Fees
While balance transfer credit cards may save you money, they won't help you get out of debt. You need to make an effort to repay your credit cards. A lower monthly payment means less interest over time. There are also credit cards available with a zero per cent intro APR.
Consumers who wish to reduce credit card debt or save money are attracted to balance transfer credit cards. Many offer an introductory interest-free period from six to 18 month. Other cards offer longer introductory periods. You should also be aware that there are fees and other conditions. You could lose your cardholder contract and have the introductory interest rate reduced.
Limits
A balance transfer credit card for people with bad credit can help consolidate your debt. However, be aware that the limits may not be too high. You might not be allowed to transfer $10,000 of your existing balance to the new card. A card with a credit limit greater than $12,000 is a good choice. Because a card with a greater credit limit is more likely than a card with a lower limit to accept the full balance transfer,
Your credit score, income and other factors will determine the credit limit for your balance transfer credit card with bad credit. Some cards allow transfers up to 100% of the credit limit. Others only allow for transfers up to seventy-five per cent. Before applying for a card, it is important to check the limits.
Alternatives
Although balance transfer credit cards are useful for those with bad credit, they may not be right for everyone. They may lower your monthly bills, but balance transfer cards won't be the best way of paying off debt or improving your credit score. Instead, consider applying for a secured credit card and paying down your debt to improve your credit score.
An alternative to a credit card balance transfer is an arranged-overdraft. This is an extension on your bank account. A arranged overdraft allows you to withdraw money if your balance falls below a specified amount. Although the interest rate on this feature is usually high, some banks will let you set up an arrangement overdraft interest-free.