Credit Card Transfers and Credit Card Rewards

Credit card transfers are a very useful means of being sure that you’re always getting the best possible deals . Essentially a credit card transfer is when the outstanding capital on an existing card is moved from one lender to another , such that the new lender repays the debt owed to the previous bank and so effectively buys your debt and becomes your new lender : one way of looking at it is that you are using a credit card to repay the lump sum on another credit card.

In paying off the balance in this manner, you can shut down the old card and so end your agreement with that company : the outstanding sum will assume instead the new ts and cs you have signed up to with your new credit card provider . There can be a great many reasons for you to agree to this form of credit card transfer perhaps the new lender offers a lower credit charge (APR) , or perhaps they have a lower minimum monthly repayment which allows you to reduce your monthly outgoings . The new lender may even have some added benefits such as credit card rewards, air miles or as a means of enticing new business they many offer 0% interest on the transferred balance , which would allow you for a limited period to have every penny of your repaid money be used in its totality against the lump sum you’ve borrowed rather than being used up in servicing the debt and paying credit charges.

When carrying out a credit card transfer, you must always remember to close the former card down. If you leave the old card open having paid it off with a transfer you might feel a temptation to reuse it in future, in which case you will be opening yourself up to a situation in which you are borrowing more from your combined cards than you can comfortably pay back monthly. When transferring your cards you may even cut up the old card and have no intention of using it again, but this all you should do: unless you close the account by contacting the lender and asking them formally to close it , any future check on your credit will reveal you to have this lending facility available to you, which could reduce the amount that you might be lent in future against big ticket items like a new sofa, a new vehicle or even your house.

The credit card rewards that might tempt you to enter into a credit card transfer are numerous . One type of credit card reward is air miles, in which for each given percentage of your total spend , you are given an allocation of miles on a flight . By collecting the air miles you can reduce the cost of your flights. This is particularly useful for people who fly a lot. Some stores also have their own variety of credit card rewards, under which they add points to your store loyalty card when you spend on your credit card. These can then be used to reduce the cost of your grocery expenses. Some credit card rewards even include discounts towards your bill with specific wine merchants ! Although this is worth considering for the right customer, you should think long and hard before entering into a credit card transfer because of a credit reward such as a discount on your wine bill – there must be other, more sensible deciding points you should bear in mind when comparing credit cards.