A balance transfer credit card is an option for those with poor credit who have not paid off their credit cards in a while. This credit card allows you transfer your balance into a new account with a low interest rate for an initial period. After the intro period, any balance that isn't paid in its entirety will attract a higher interest.
Low introductory APR
The low introductory APR balance-transfer credit cards are an excellent option if you need to pay off a large amount. These cards usually have no annual fees and a low introductory balance transfer APR. These cards often offer rewards programs that could lead to cash back throughout the life of your account.
You can check your credit score to see if you qualify for a low introductory APR balance transfer credit card. If your credit score is below 580, it's considered "poor". You should consider both the promotional period (and the APR) when applying for a balance transfer credit card with low interest rates.
No interest-free period
There are a few things you need to consider when selecting a balance transfer credit cards. You should consider whether the card will offer an interest-free period. If it doesn't, you could end up paying more than what you planned to. It is important to pay attention also to the credit limit.
Your credit score can have a significant impact on your ability to qualify for a balance-transfer card. Issuers are more likely to approve applicants with good credit since it allows for longer interest-free periods, and lower interest rates. Your credit score will also determine how much debt you are allowed to transfer to a new credit card. This may be a fixed dollar amount, or a percentage of your total limit. While each situation is unique and will vary, you can expect to receive fewer credit cards companies if your credit score is lower.
Fees
While balance transfer credit cards may save you money, they won't help you get out of debt. You need to make an effort to repay your credit cards. A lower monthly payment means less interest over time. You may also be able to find credit cards with an intro APR of zero percent.
Consumers who want to reduce their credit card bills and save money like balance transfer creditcards. Many cards offer an initial interest-free period between six and 18 months. Other cards offer longer initial periods. Be aware that there may be additional fees or conditions. You can be penalized if you violate the terms of the cardholder agreement.
Limits
You can consolidate your debt by getting a balance transfer credit credit card for poor credit. However, it is important to be cautious about the credit limit. It is possible that you won't be able transfer your entire balance to your new credit card if you have $10,000 in outstanding debt. You should look for a card with a credit limit of $12,000 or higher. This is because credit cards with higher limits are more likely to allow balance transfers.
Your credit score, income and other factors will determine the credit limit for your balance transfer credit card with bad credit. Some cards allow you to transfer 100% of your credit limit while others only allow you up to 75%. Before applying, be sure to verify the limits.
Alternatives
Although balance transfer credit cards are useful for those with bad credit, they may not be right for everyone. Balance transfer cards can help lower your monthly payment, but they are not the best way to reduce debt or increase your credit score. You can improve your credit score by applying for a secured loan card and paying down debt.
An alternative to a credit card balance transfer is an arranged-overdraft. This is an extension on your bank account. A arranged overdraft allows you to withdraw money if your balance falls below a specified amount. Although the interest rate on this feature is usually high, some banks will let you set up an arrangement overdraft interest-free.