Low Interest Credit Card Only for Balance Transfer

Low interest credit card can usually be used for the two transactions, namely purchases and balance transfers. But you should choose one. If the balance of your old credit card is very large, you should only use the new card to transfer balances.

Why? You can focus if a new card is only used for one transaction, that is the balance transfer. You can  transfer your balance to a new card and then pay off all your debts.

If you are using a new card for spending, the balance is still growing. This makes you difficult to immediately pay off all your debts. If your low credit cards interest rates period expires, while your balance is still large, you will be charged high interest on the remaining balance.

If it turns out the regular interest after the introductory period is higher than in the old credit card, you will get large losses. The burden of monthly bill payment will jump high and the numbers would be enormous.

Two Things You Should Consider When Transfer Balance

Therefore, you should only use the new credit card for balance transfers. You are two things you should consider when transferring balances to new card.

The first is the balance amount to be transferred. The amount must be maximum 30% of your credit limit. Each card has a credit limit. If your credit limit is $ 4,000, the maximum transfer is $ 1.200. If the balance in the new card exceeds $ 1.200, your credit score will drop. It should not happen because the declining of credit score will create financial hardship for you.

The second is the transfer fee. Generally, credit card offers balance transfer fee 3% of your balance you transfered in 0 percent interest period and 5% after the introductory period runs out.

The only credit card that offers a free transfer fee is a Slate from Chase. But with no balance transfer fee is only valid for 30 days since you open an account on Slate. This requires you to move quickly in order to make use of free balance transfer fees.

For example, today you transfer balances and pay bills immediately without waiting for notification. Then transfer it again and pay bills. During the one month you can transfer three times and paying bills three times. It can makes the repayment of debt lasted fast and the low interest credit card is really effective.