Using Balance Transfer Credit Cards
A balance transfer credit card is one of the very best types of credit cards one can have. This type of card is special because it allows a debtor to transfer his or her debts from other lenders to the new credit card. A consumer can use a balance transfer credit card as a credit repair tool if he or she has the knowledge. Some people have conducted debt consolidation with these types of cards.
Applying for a Balance Transfer Credit Card
A person can apply for a balance transfer credit card the same way he or she can apply for any other type of credit card. The lender will have an online application that asks for information such as name, address, employer and income amounts. Near the end of the application, the consumer can add account numbers from other credit cards and financial products. The lender will make a decision on the application based on the applicant’s credit history.
Performing a Consolidation
If the lender issues the applicant a large enough initial credit line, he or she can use the card as a consolidation tool. For example, a person with three credit cards with $500 balances can merge them by transferring them to a balance transfer card with a $1,500 credit line. Performing a consolidation in this manner can save the debtor a ton of money in interest fees. Some balance transfer cards have a $0 annual percentage rate for an introductory period. The debtor can use this introductory period to pay off his or her other cards while enjoying the benefit of not having an APR attached.
Using a balance transfer card to consolidate can improve a person’s credit score very quickly. In three to six months, the consumer might qualify for cards with higher credit lines.