The ultimate guide to balance transfer credit cards

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Transferring a credit card’s balance to a new card requires getting the new card provider to approve the transfer. The process begins when you submit a balance transfer application. While a typical balance transfer may process in up to seven days, some card providers say it might take up to 21 days. Transferring debt from multiple credit cards to a single card (debt consolidation) is also possible.

MoneyGeek Takeaways:

Look for a suitable balance transfer card.

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Identify the balances you wish to transfer.

Request for a transfer and wait for the decision.

How to Do a Balance Transfer on a Credit Card

Learning how to transfer a credit card balance to another card requires understanding the intricacies of the process. Once you do, carrying out a balance transfer becomes rather straightforward. Aspects that need your attention include:

1. Selecting a balance transfer card

Make a selection based on whether you might benefit more from getting a card with a time-based 0% APR offer or one that comes with a low regular APR. If you’re getting a 0% APR balance transfer card, check the duration of the promotional period and the APR that applies once the promo period ends. Also take note of any balance transfer fees, annual fees, APRs on purchases and added features.

2. Selecting the balances to transfer

If you wish to transfer balances from multiple cards, select the ones with the highest APRs first. Remember that the total amount you transfer needs to remain less than the available credit limit of your new card.

3. Initiating the balance transfer process (in time)

Depending on the issuer of the card to which you wish to transfer a balance, you might be able to begin the process online or over the phone. Typical details you need to provide include the name of the card, the name of its issuer and the desired transfer amount. If you get a new card with a 0% APR offer on balance transfers, you might need to initiate the process within a stipulated time frame to make use of the offer. For instance, the U.S. Bank Visa Platinum Card’s 0% APR on balance transfers applies only on balances transferred within 60 days from account opening.

4. Waiting for a decision

Your card provider holds the right to approve or deny your request for a balance transfer. Reasons for denial may include waiting for too long after getting a new card, wanting to transfer more than your available credit limit or trying to transfer a balance from a card issued by the same card provider.

5. The actual transfer

Once a card provider approves a balance transfer request, it may pay the credit card issuer mentioned in your application automatically or send you a check. If you receive a check, you need to send it to your old card’s issuer on your own.

How Long Does a Balance Transfer Take?

The time it takes for a credit card balance transfer to go through depends on the card issuer that’s responsible for handling the transfer, either directly or by sending you a check. Balance transfers usually go through in five to seven days, although they may take longer. Irrespective of the card provider handling your transfer, you may expect to find out the estimated turnaround time in advance.

MoneyGeek Expert Tip:

Choose a balance transfer card based on the length of the 0% APR offer, balance transfer fees, annual fees, regular APRs and added perks. MoneyGeek experts have narrowed down on the best balance transfer cards by relying on the company’s unique ranking methodology.

Can You Transfer Multiple Balances?

If you have outstanding balances on multiple credit cards, you may want to consider consolidating this debt by getting a single balance transfer card. However, the maximum amount you may transfer cannot exceed the available credit limit of your new card.

For example, if you get a balance transfer card with a credit limit of $10,000 and use it to make a $1,000 purchase, your available credit limit drops to $9,000. However, this is not the exact amount you may transfer from other cards because you also need to account for balance transfer fees.

Assume that your new card charges a 3% balance transfer fee. If you wish to transfer $5,000 from one card and $4,000 from another, you will need to pay balance transfer fees amounting to $270, which adds to your new card’s starting balance. To complete these transfers for the entire amounts on both cards, you will need an available credit limit of at least $9,270 on your new card.

The effect of multiple transfers on your credit utilization ratio

Carrying out multiple transfers to a single credit card may affect your credit score by increasing or decreasing your credit utilization ratio (the percentage of the amount you’ve borrowed from your total available credit).

Assume that you wish to transfer $3,000 from a card with a credit limit of $5,000 and $2,000 from another card with a credit limit of 10,000. If these are your only two cards, your credit utilization ratio is 33.33%. If you transfer the total amount to a new card with a credit limit of $10,000 and close both your old accounts, your credit utilization ratio increases to 50%. However, if you keep all three accounts active, your overall credit utilization ratio drops to 20%. From a creditworthiness point of view, this number should be at 30% or lower.

Keep in mind that credit utilization is also affected by individual card balances. Although your overall credit utilization may be low, if the utilization on one card is high, that may negatively impact your credit score. Pay down this card’s balance quickly to improve your credit.

MoneyGeek Expert Tip

Because most balance transfers do not happen immediately, it is important that you continue to make payments on your current balances until you confirm that the balance has been transferred. This helps you to avoid late fees and penalty APRs on your existing accounts. — Lee Huffman, credit card expert at BaldThoughts.com

Other Questions You May Have About Balance Transfer Cards

Go through answers to other commonly asked questions about how to do a balance transfer so that you’re well prepared if you decide to carry out the process.

COLLAPSE ALL

Does a balance transfer happen automatically?

A balance transfer does not happen automatically. You need to apply for a balance transfer. Upon approval, your new card provider might pay your old card provider directly or send a check to you. If you receive a check, you then need to forward it to your old card provider.

How do you ask for a balance transfer?

You need to submit a balance transfer application that is subject to approval. Depending on your card provider, you may initiate the process online or over the phone.

How long do balance transfers take with Chase?

Most balance transfers with Chase process within a week. However, it may take up to 21 days in some cases.

Can you do balance transfers online?

Most issuers of balance transfer cards let you initiate the balance transfer process online.

How do I know if my balance transfer was approved?

If your card provider sends transaction-related notifications via email or text messages, you may expect to receive one when your balance transfer is approved. You may also receive a letter confirming the balance transfer. Alternatively, you may log in to your card provider’s online platform and check the status of your balance transfer request at any time.

Why would a balance transfer fail?

A balance transfer might fail if the amount you wish to transfer exceeds your available credit limit, if you initiate the transfer after the time period mentioned in a balance transfer offer or if you’re trying to transfer a balance from a card issued by the same card provider.

Is it bad to do multiple balance transfers?

Transferring balances from multiple credit cards to a single card to consolidate your debt might work well if you have a concrete payment plan in place. Hoping to transfer the same balance repeatedly over time by using different balance transfer cards with 0% APR offers is fraught with risks. For instance, your applications for new cards and balance transfers remain subject to approval.

Next Steps

Now that you know how to transfer balances on credit cards, determine if going down this road might work well for you. If you think you might benefit from getting a balance transfer card, look for one based on factors such as eligibility criteria, duration of intro APR offers, regular APRs, balance transfer fees and annual fees.

This article originally appeared on MoneyGeek and was syndicated by MediaFeed.org.


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15 rewards credit cards worth checking out

15 rewards credit cards worth checking out

So, you’ve decided it’s time for a new credit card, but you want to make sure your card gives you more than just access to funds when you need them. That’s where rewards credit cards come in. 

Rewards credit cards can be a boon for your financial goals if you choose wisely, but there are a lot out there to choose from. Here’s a list of 15 rewards credit cards worth checking out in 2019. All the details are current as of March.

DepositPhotos.com

  • Standout Feature: Unlimited cash back and low purchase APR
  • Signup Bonus: None
  • Annual Fee: $59 but waived for the first year
  • Purchase APR: 12.49% – 15.49%
  • Late Payment Fee: Up to $27; penalty APR of 25.49%
  • Rewards: Earn 3% cash back on all purchases for the first year, then 2.5% cash back

Alliant Credit Union

  • Standout Feature: Rewards for Amazon.com and Whole Foods purchases
  • Signup Bonus: $70 Amazon.com gift card upon approval
  • Annual Fee: $0 — but you have to be a member of Amazon Prime, and there is a $119 annual fee for that ($59 for Amazon Prime Student memberships)
  • Purchase APR: 16.49% – 24.49%
  • Late Payment Fee: Up to $38
  • Rewards: Earn 5% cash back for Amazon.com and Whole Foods purchases, 2% cash back at restaurants, gas stations, and drugstores, and 1% cash back on all other purchases

Amazon

  • Standout Feature: Rewards for everyday spending and you can use your rewards for eligible charges, plus the ability to make interest-free purchases for the first 15 months
  • Signup Bonus: 15,000 membership rewards points if you make $1,000 in purchases in the first three months
  • Annual Fee: $0
  • Purchase APR: 0% for the first 15 months, then 15.24% – 26.24%
  • Late Payment Fee: Up to $28; penalty APR of 29.99%
  • Rewards: If you make 20 or more purchases in a billing period, you earn 20% extra points on those purchases, plus 2x points for money spent at supermarkets (up to $6,000 per year in purchases) and 1x points for other purchases
  • Premium versions: If you’re interested in more rewards and are open to an annual fee, check out the American Express Gold Card and the Blue Cash Preferred Card

American Express

  • Standout Feature: Unlimited points that don’t expire, as well as multiple redemption options (cash back, statement credit, travel, gift card, or Bank of America or Merrill Lynch account deposit)
  • Signup Bonus: 50,000 bonus points if, within 90 days of account opening, you make $3,000 in purchases
  • Annual Fee: $95
  • Purchase APR: 18.24% – 25.24%
  • Late Payment Fee: Up to $39; penalty APR of up to 29.99%
  • Rewards: Earn two points for every $1 of travel and dining purchases, 1.5 points for every $1 spent on other purchases — qualifying purchases can also get you up to $100 in airline incidental statement credits, as well as a $100 credit for TSA Precheck or Global Entry; Bank of America Preferred Rewards clients also get 25%-75% of a rewards bonus for every purchase

DepositPhotos.com

  • Standout Feature: Unlimited points that don’t expire, plus no interest on purchases for the first year
  • Signup Bonus: 25,000 bonus points if, within 90 days of opening the account, you make at least $1,000 in purchases — can only be used as a travel purchase statement credit
  • Annual Fee: $0
  • Purchase APR: 0% for 12 billing cycles, then 17.24% – 25.24%
  • Late Payment Fee: Up to $39; penalty APR of up to 29.99%
  • Rewards: Earn 1.5 points for every dollar spent on all purchases; Bank of America checking or savings account holders also get 10% bonus points for every purchase while Bank of America Preferred Rewards clients get 25% – 75% bonus points for every purchase

DepositPhotos.com

  • Standout Feature: A travel rewards card that gives you miles back every time you redeem your miles
  • Signup Bonus: 70,000 bonus miles if, within 90 days of opening the account, you spend at least $5,000 on purchases
  • Annual Fee: $89 but waived for the first year
  • Purchase APR: 18.24%, 22.24%, or 25.24%
  • Late Payment Fee: Up to $37
  • Rewards: Earn 2x miles for every dollar spent on purchases; when you redeem miles, you earn 5% of your miles back

DepositPhotos.com

  • Standout Feature: 5% cash back on quarterly rotating categories, no interest on purchases and balance transfers for the first year
  • Signup Bonus: If you spend $500 on purchase the first three months, you get a $150 bonus
  • Annual Fee: $0
  • Purchase APR: 0% for the first 15 months, then 17.24% – 25.99%
  • Late Payment Fee: Up to $38
  • Rewards: Earn 5% cash back on quarterly bonus categories (with a limit of $1,500 in purchases and you have to remember to activate each quarter), plus unlimited 1% cash back for all your other purchases

DepositPhotos.com

  • Standout Feature: You get 25% more value if you redeem your points for travel through Chase Ultimate Rewards
  • Signup Bonus: You get 60,000 bonus points if you spend $4,000 on purchases within three months of opening your account
  • Annual Fee: $95
  • Purchase APR: 18.24% – 25.24%
  • Late Payment Fee: Up to $39
  • Rewards: Earn 2x points on travel and restaurants, plus one point per dollar for all other purchases
  • Premium Version: If you’re interested in even more rewards and are open to an annual fee, check out the Chase Sapphire Reserve

DepositPhotos.com

  • Standout Feature: High percentage of cash back on certain spending categories, plus no interest on purchases and balance transfers for the first 14 months
  • Signup Bonus: Discover will match the cash back earned at the end of your first year
  • Annual Fee: $0
  • Purchase APR: 0% for the first 14 months, then 14.24% – 25.24%
  • Late Payment Fee: $0 for the first one, then up to $37
  • Rewards: Earn 5% cash back on quarterly rotating purchase categories when you activate, plus 1% cash back on all your other purchases

Discover

  • Standout Feature: A secured credit card that earns rewards, helping those with bad credit earn rewards while improving their credit
  • Signup Bonus: Discover will match the cash back earned at the end of your first year
  • Annual Fee: $0
  • Purchase APR: 25.24%
  • Late Payment Fee: $0 for first one, then up to $37
  • Rewards: Earn 2% cash back for up to $1,000 (per quarter) in purchases at gas stations and restaurants, plus 1% cash back on all your other purchases

Discover

  • Standout Feature: A rewards credit card you can use to fund your retirement or other Fidelity accounts
  • Signup Bonus: None
  • Annual Fee: $0
  • Purchase APR: 16.24%
  • Late Payment Fee: Up to $38
  • Rewards: Earn two points for every dollar you make in purchases; points don’t expire

DepositPhotos.com

  • Standout Feature: A rewards card for those who spend on dining and entertainment
  • Signup Bonus: Spend $3,000 on purchases within the first three months of opening the account, and you’ll receive a $500 cash bonus; if you use your card to sign up for Postmates Unlimited, Capital One will give you a statement credit for the monthly fee through December 2019
  • Annual Fee: $0 for the first year, then $95
  • Purchase APR: 16.74% – 25.74%
  • Late Payment Fee: Up to $38
  • Rewards: Earn 4% cash back on purchases related to dining and entertainment, 2% for grocery store purchases, and 1% for all your other purchases — you also get 8% cash back on purchases made through Vivid Seats through May 31, 2020

Capital One

  • Standout Feature: A business credit card that earns rewards
  • Signup Bonus: Spend $4,500 on purchase within the first three months of opening the account, and you’ll receive a $500 cash bonus
  • Annual Fee: $0 for the first year, then $95
  • Purchase APR: 19.24%
  • Late Payment Fee: Up to $39; penalty APR of 31.65%
  • Rewards: Earn unlimited 2% cash back rewards

Capital One

  • Standout Feature: Tiered rewards focused on dining, travel, and online purchases
  • Signup Bonus: You get a $100 cash bonus if you make $500 in purchases within 90 days of account opening
  • Annual Fee: $0
  • Purchase APR: 17.24%, 22.99%, 25.99%
  • Late Payment Fee: Up to $37
  • Rewards: Earn 4% cash back on restaurants, takeout, bars, and Uber Eats, 3% cash back on travel (including flights, hotels, and vacation home rentals), 2% for other online purchases (with the ability to earn up to $50 in a statement credit for online subscriptions if you spend at least $5,000 per year), and 1% for all your other purchases

Uber.com

  • Standout Feature: A travel credit card that enables you to 5x your rewards by spending at eligible hotels
  • Signup Bonus: Get 50,000 bonus miles if you spend $3,000 within three months of account opening on purchases
  • Annual Fee: $0 for the first year, then $95
  • Purchase APR: 17.99%, 22.74%, 25.24%
  • Late Payment Fee: Up to $38
  • Rewards: Earn 2x miles per dollar you make on purchases (unlimited) and 10x miles on eligible hotels through January 2020; receive a $100 Global Entry or TSA Precheck Credit

This article originally appeared on UpturnCredit.com and was syndicated by MediaFeed.org.

DepositPhotos.com

Featured Image Credit: istockphoto/Ridofranz.

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