The Smart Approach to Consolidate Debt through Balance Transfer
Do you know that you can consolidate debt using balance transfer? Well, if you are unaware of this approach, then we will just answer your concerns right here. The balance transfer is a perfect strategy to consolidate your debt when you have a good credit score and only have to consolidate a small amount of debt.
When you have decided to consolidate debt through a balance transfer, make sure that you acquire the basic understanding of this process so that you do not have to deal with any surprises later on.
How to Consolidate Debt through Balance Transfer
Apply For A 0% Balance Transfer Credit Card
First, it is essential that you should apply for the balance transfer credit card. Try to get hold of a card that has a long introductory period. Your basic objective is to get hold of 0% APR with the help of an excellent credit score.
Move Your Balance
When you have got hold of your card, then it is time to move your balance. You need to remember that each balance transfer is subjected to a transfer fee. This fee is about 3% of the actual balance transferred. For example, if you transfer a balance of about $1000, then you will have to bear up with a fee of about $30.
Pay the Maximum in the Introductory Period
Your basic objective is to pay off your debt during the introductory period of the card. The reason is that the interest rate will increase after the introductory period. Let us assume that you have to pay about $5000 and the introductory period is about 18 months.
This means that you will have to pay about $278 each month so that you can eliminate the debt pile before the introductory period of the card ends.
Do Not Make Any Charges on Other Credit Cards
If you have decided to use abalance transfer to consolidate your debt, then it is important that you should not make any charges on any of your other credit cards till you can get rid of your debt completely.
Follow this strategy,and you will be able to get rid of your credit card debt is simply no time.
When you have paid off all your debt using debt consolidation, then you should make sure that you review your budget. Make it a point to put about 5% of your income for emergency situations also.
However, there is one important thing that you should remember if you have decided to consolidate your debt using balance transfer. This facility of balance transfer can only be used to transfer credit card balance.
You cannot always pay off your loans or medical bills using balance transfer. If you need to pay off your medical bills or personal loans, then you may have to contact a good debt consolidation firm so that they can introduce other options to consolidate debt.