When you decide to conduct a balance transfer, it is also important to determine how much you want to transfer. If you have a balance that exceeds $10,000, it is unlikely that you will be able to move over the entire amount to one card. Many credit card companies will give you a limit on how much you can transfer. Even if this is the case, moving over as much as you can will allow you to immediately begin saving money.
If you use your debit card and overdraw your account, your bank will hit you with an overdraft fee. If you make five purchases of ten dollars each on the same day, you'll get five more overdraft fees. And just to make sure you get hit with as many fees as possible, your bank will make sure to debit your biggest transaction of the day first — even if it was actually the last one you made that day. That way your account goes to zero faster and every subsequent debit triggers another fee.
In order to lure new customers for their credit cards, the companies offer balance transfer credit cards wherein you can transfer your old credit card debts to the new ones. The customer has a great advantage in such transfers as once the money is owed to the new company, it offers a grace period wherein the interest rates on the balance transferred is very less, sometimes even nil. This gives a chance to the customers to pay off the credit card debts at the least cost possible. This special rate offered by the new banks lasts for around 6 months to a year after the balance transfer takes place.
Some people become discouraged when they realize they can't transfer over the entire amount, but this is not the right attitude to have. Paying off a large credit card balance won't happen in one day, and it is important to take your time and use discipline. Another thing you will want to consider is the fee that may be charged if you transfer funds. A typical fee will be 3% of the total amount transferred, and this could be a large amount depending on the amount you want to transfer. Some banks have solved this problem by placing a limit on how much they charge in order to transfer a balance.