Many credit card companies offer sign-on bonuses for consumers looking to transfer a balance from an existing card to a new one. These deals may give you the opportunity to pay off, or at least shrink, your total debt without worrying about high interest accumulation.
There are some limitations to balance transfers, though:
If any of these factors are a turn-off for you, or if the majority of your debt is not on a credit card, we suggest skipping ahead to the next section on Personal Loans. If you think a balance transfer is a good place to start eliminating your debt, let’s get started.
You’ll need the most recent statement balance, the APR, and the issuing bank for each of your credit cards. These can all be found on a copy of your statement, but you may also be able to find them through your online account or by calling your credit card company. We’ve included a worksheet on the next page for you, or you can make note of this information in a secure document or notebook.
Your Statement Balances
You will want to note the total statement balance, but if you also have cash advances or promotional rates (such as an introductory 0% interest rate that is still active) you will want to section each of these balances off before we get to the next step. As stated above, all of this information can be found on your account statement, and most credit card companies will section off each section’s balance toward the bottom of your statement.
Again, you will want to write down the APRs for each individual section. Keep these numbers together, as we will be referencing which balance has which APR in the future.
Your Issuing Bank
The issuing bank is the actual organization that manages your credit card account – sometimes this information is hard to find, especially for retailer credit cards. For instance, Comenity Bank issues credit cards for Victoria’s Secret, GameStop, Gander Mountain, and dozens of other retailers. You will need to know this because you can only transfer a balance to a different bank than the one currently managing it.
Now that we have all of this information laid out in front of us, let’s talk about strategy.
Now that you have successfully completed your balance transfer(s) you can continue to our section on Paying Down Your Debt to learn the best strategies for getting rid of these balances all together.