Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
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By O1ne Mortgage
A balance transfer credit card allows you to move the balance of one or more credit cards to another, typically to take advantage of better terms and conditions. These cards are often used to consolidate credit card balances and save money on interest by leveraging a lower annual percentage rate (APR).
Many balance transfer credit cards attract new customers with a temporary 0% intro APR offer. In some cases, this promotional interest rate includes both balance transfers and purchases, allowing you to carry both types of balances interest-free for a limited time.
While it may be tempting to use your balance transfer card for new purchases, there are several disadvantages to consider:
When used correctly, a balance transfer card can be a smart way to pay off high-interest rate balances. Here are some tips to maximize its benefits:
Terms vary between credit cards, so pay close attention to the length of the introductory period and the ongoing APR after the promotional rate expires. Ensure you understand whether the 0% APR also applies to purchases.
Balance transfer fees are typically a percentage of the amount transferred. Before completing the transfer, compare the fee to the amount of interest you would pay based on your current APR and monthly payment to ensure it’s worth it.
Paying off the transfer balance by the end of the promotional period maximizes your interest savings. Calculate your minimum monthly payment by summing the balance and the transfer fee, then dividing that amount by the length of the introductory period.
Mixing balances with different interest rates on your balance transfer card complicates the repayment process. Even purchases on your other credit cards reduce the amount you can afford to pay toward the balance transfer.
While it’s technically possible to make purchases on a balance transfer card, it’s not advisable if the promotional APR only applies to balance transfers. Instead, focus on using the card to pay off high-interest debt and avoid new purchases to maximize your savings.
At O1ne Mortgage, we understand the importance of managing your finances effectively. If you have any mortgage service needs, don’t hesitate to call us at 213-732-3074. Our team of experts is here to help you navigate your financial journey with confidence.
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