balance transfer

The Best Balance Transfer Credit Cards

September 27, 2015 by penn

There are many individuals in debt, but not many understand the various ways to get out of debt; using the balance transfer credit cards is a not so obvious way to pay off debt. The balance transfer credit cards are a great way to pay debt off and save money while you’re getting out of debt. Below are a few highlights to answer your concerns and questions about balance transfer credit cards.

Why get a Balance Transfer Credit Card

Reduce the amount of interest you pay on your debt
Make a payment on a purchase in the future
Avoid interest payments
Consolidate credit card debt to one card

Scenario to get a balance transfer credit card

Consider a large debt that you have from a current credit card with 20% interest, let’s say you owe $10.000 AUD. You’re minimum payment is $166 for the interest. So in one year you’ll pay approximately $2.000 AUD which is a lot of money on the interest alone.

Now, let’s consider the alternative with a debt on one of your current credit cards of $10.000 AUD. The best reason for a balance transfer credit card is to eliminate the on-going interest from one credit card and move it to a credit card that offer 0% APR for 12 months to save you $2.000 AUD in interest.

Additionally, a balance transfer credit card makes it easier for you to consolidate credit card debt by moving it over to one card to only have one credit card debt to keep track of.

What you should know about Balance Transfer Credit Cards

It’s not a quick fix for debt related issues, but it will help to put you back on track to pay off your debt while reducing interests for on-going credit card debt. Below is a list of highlights to think about when you’re in the market for a balance transfer credit card:

A range of 3% to 5% fee is usually mandatory to transfer debt.
Typically, good to excellent credit is a requirement, so check your credit score before applying to a balance transfer credit card.
The 0% interest is usually only good for a limited time period, the range is typically between 12 to 18 months and is an introductory offer before the rate resets. Read the fine print.

Two suggested cards for Balance Transfer Credit Cards

Nerdwallet.com provides a rundown of balance transfer credit cards to consider: from Chase credit cards to American Express with the lowest fee at 0% to the highest at 5%.

Chase Slate

Chase Slate this is the highest ranked option for a balance transfer credit card without a fee. However, the rate is an introductory rate for the first 15 months is a great offer. In order to obtain and qualify for the offer, the transfer must be complete within the first 60 days after opening the account. If the deadline of 60 days is surpasses than Chase applies an automatic 3% transfer fee with a minimum charge of $5.00 AUD).

Once the 0% APR introductory period expires then it automatically adjusts between 12.99% up to 22.99% based on your credit score. However, there is no annual fee on the credit card and that remains for the lifetime that you own a Chase Slate credit card.

The perks to owning a Chase Slate card are well worth it: free monthly FICO Score, zero liability protection, fraud protection, fraud alerts and purchase protection.

Citi

Citi takes second places because of its 0% APR offer for 21 months. This is the lengthiest duration of time for all existing balance transfer credit cards available. However, the condition is to complete the balance transfer is within four months with a 3% balance transfer charge (minimum transfer fee of $5.00 AUD).

Citi Simplicity Card the credit card offers a 0% credit card balance transfer and on purchases with no annual fees, late fees or penalty rates. After 21 months then it re-evaluates the interest rate depending on your credit score.
Citi Diamond Preferred Card There is many similarities to City Simplicity Card, offers 0% for balance credit card transfers and purchases. No annual fee, late fees or penalty rates. Then it re-evaluates the interest rate after 21 months, depending on your credit score. However it’s 1% lower than the Citi Simplicity Card at 11.99% to 21.99%.

The Benefits of Citi credit cards

$0 liability on unauthorized charges
Citi Identity Theft Solutions
Extended warranty of 5 years/$10.00 AUD per year (limited to purchases, worldwide car rental insurance for theft or damages and capped at $50.000 per year).
Travel and emergency assistance before and during your travels
Connected to Apple Pay
Citi Price Rewind: Citi will search for a reduced price for 60 days after a purchase and refund each item up to $300 with a limit of $1.200/annually.

[Read: Chase Sapphire Preferred vs. American Express Platinum]

Final Thoughts

Finding a balance transfer credit card is an option to pay off debt quicker and reduce interest. However, it means that more money goes towards the principal. So as a result your money is working for itself.

Last, keep in mind a balance transfer credit card is not a quick fix but an alternative to set yourself to a healthier financial position, and if you can change your mindset to believe in it then a balance transfer credit card is a suitable option for you.

Here’s what you need to know more as well:

Debt Relief Options That Lower Your Monthly Debt Payments

May 18, 2013 by penn

Debt becomes hard to get out of because it restricts your monetary resources significantly. So if you want to survive your debts, you may want to find a way to lower your monthly contributions. That way you have more money to spend on other things in your life.

But how can you do this? Surely your creditors will not allow you to dictate how much you will send towards your debts without imposing some sort of penalty. The good news is, you have debt relief options that will make this possible and minimize or eliminate the penalty charges associated with it. All types of program will allow this to happen but you need to consider what you have to sacrifice for it.

Debt consolidation is probably the best debt relief option that will allow you to lower your monthly payments without ruining your credit score. There are three different ways to accomplish this.

First of all, you have debt management. This type of consolidation involves a debt counselor. They will help you come up with a debt management plan that basically stretches your payment over a more extended term. This is what makes your lower monthly contribution possible. They will show this plan to the creditor and if they approve, you can send a single payment to the counselor and they will be in charge of distributing it to the rest of your debt accounts. They will also negotiate for a lower interest rate which will lower your monthly payment even more.

The second option is debt consolidation loans. In this method, there is no professional involved but the same consolidation and longer payment term takes effect. Unlike the previous, a low interest rate is easier to guarantee. What you will do is apply for a loan that is enough to pay off your debts – at least the accounts that can be paid in advance. Some type of debts will penalize prepayment transactions. The key is to make sure your loan has a low interest – which can be done if you have a high credit score or a collateral. Loan payment terms are usually 3-5 years long and that can help lower your monthly payments too.

Another option is balance transfer. This means getting a new card that has a zero interest promo. The consumer will transfer the amount so that the high interest balance will be transferred to one that will not impose interest – at least during the promo period. This usually lasts from 6 months to a year. That means any payment that you will make during this time will only go to the principal debt.

There is also the option to get out of debt using debt settlement and bankruptcy. Both can also allow you to make lower monthly payments. Debt settlement actually aims for an overall debt reduction. The idea is to negotiate with the creditor so you are allowed to pay only a percentage of your debt and have the rest of it forgiven. Bankruptcy involves a court system that will decide if your debts should be discharged or not. If your financial conditions are qualified, you could end up not paying anything towards your creditors. Of course, that comes with a price and it is your credit score. If you don’t mind lowering your credit score, then these two could be an option for you.

Options To Pay Credit Card Debts With High Interest Rates

April 5, 2013 by penn

What makes credit card debt so difficult to get out of is the high interest that you have to pay off on top of the principal amount that you really owe. If this is what you are worried about, there is a way for you to eliminate or lower this rate so you can put more contributions into your debt amount.

The worst you can do with credit card debt is to stick to the minimum payments. It will take you ages to completely finish off your debts. What you need to do is to enrol in a debt relief program that will allow you to make bigger payments on your debt balance and at the same time, lower your interest rate.

Your best option to achieve the above mentioned goals is debt consolidation. The great thing about this solution is the fact that it will have the least effect on your credit score.

There is more than one way to eliminate the high interest on your credit card balance. Debt consolidation loans, specifically, have various options available. If you have a valuable asset like a home or something similar, you can put it up as collateral so you qualify for a secured loan. You will be given a low interest rate on your loan because of the low risk factor that your collateral can bring. In case you default on your payments, the lender can get it to substitute as payment for the debt. You can take the approved loan and use it to pay off your high interest debts. Of course, you are endangering your home in this scenario. But if you have a steady income and you are sure that you can meet payments, then go ahead with this option.

Debt management can also be an option but the lowering of the interest rate is not always guaranteed. But you can still try to talk to a debt counselor to know your chances to get approval for your request.

Another way to pay credit card debts with very high interest is through balance transfer. For a certain fee, you can transfer the balance of your other cards into a low or zero interest card. The low interest is usually just applicable for a certain period so you need to know the schedule so you can take advantage of it. Make sure you are able to pay off a significant percentage of your debt during this promotional period.

Of course, you can also lower the interest rate of your debt by simply asking for it. They usually have a program in place for people who are financially hard up but would still like to pay off what they owe. If you can prove that you are in a financial crisis, they may agree to lower your interest as long as you keep up with the payment term that you have agreed to follow.

The thing about these methods is they will get you out of debt but staying out of it is an entirely different matter. You need to practice the right financial management skills, smart spending habits and save up for a reserve fund. This is the only way you can eliminate the need to get yourself in debt. If something happens that leads to your income falling short of your expenses, you have the funds to support the deficit.

Remember that if you find yourself buried in high interest credit card debt, there is a problem with the way you manage your finances. Address that concern so that you do not only get out of debt, you will learn how to stay out of it.