When you are carrying a high balance with a high interest credit card, it may be a good idea to transfer that balance to a lower interest credit card so you can save some money and pay that balance off faster. Just about any credit card company will do a balance transfer, but most charge a fee to do so. Usually, the fee is a percentage of the balance, but some credit card companies offer free balance transfers to entice users to open accounts with them. Beware of the fine print to find a good deal.
Step 1
Contact several different credit card companies and your bank to see what they have to offer. Ask specifically about balance transfers and what they cost. You might also want to call credit card companies that send you promotional offers in the mail; this means they already want your business and may be willing to give you perks in order to get you to sign up.
Step 2
Review all of the offers that you've been given after your initial inquiry. The Wall Street Journal noted that Discover card and American Express were two companies that offered promotional free balance transfers. Make a list of card offers, and their promotions. Some may have a zero percent interest rate for a specified amount of time, while some transfer the balance for free, but charge interest right away.
Step 3
Call the customer service line for the card you believe would be the best fit for your balance transfer. Request a copy of the balance transfer and cardholder agreement so that you can take some time to go over all of the terms and conditions of the free balance transfer also. Look for verbiage about the length of the balance transfer, the new credit card interest rate balance and fees.
Step 4
Read the fine print. You may notice that the card you've chosen raises the interest rate or charges accrued interest after the promotional period is over. You may find that rates change after a late payment. Knowing these things beforehand can help you make better decisions with your money after the balance transfer has taken place.
Step 5
Fill out the balance transfer form with the card that you've chosen. After you've submitted it, contact your old card to make sure that the transfer has occurred and close the higher interest card if you wish. Remember that closing credit accounts may hurt your credit score, so if you can keep the account open, do so, keeping it at a zero balance. Ask them to send you a bill with a zero balance to keep for your own records.
Step 6
Pay your bill on time and always submit to the terms you agreed to by signing the cardholder agreement. It is a binding contract, and while the card company may have made a balance transfer seem quick and easy, it is still another credit card that you need to pay on time.
Step 7
Refrain from adding new purchases to the balance transfer. Once you purchase something with the same card, the low interest rate may increase, or your payment will be applied to the balance transfer only, leaving much smaller purchases accruing interest and making an initially free balance transfer very expensive.
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