Balance Transfer Credit Card to Improve Your Credit Score

A balance transfer credit card can be useful in two different scenarios. If you have a high outstanding balance on your existing credit card and are paying a very high interest on it, moving your balance to another card that offers exciting features and a lower rate of interest is judicious. Secondly, if you have outstanding balances on several credit cards you will find it very hard to keep track of the due dates and the payments to be made. That is when it is wise to move all your outstanding balances to one credit card, making the card debt more manageable and the interest low.

Balance transfer credit cards worth taking note of

There are some impressive balance transfer credit cards available in the market. Before you apply for a credit card with bad credit, you need to take note of the offers available. A balance transfer credit card with excellent terms is not necessarily available for an individual with a low credit score. The best cards are always reserved for individuals with credit scores above 700.

Therefore, if you have a score below 600, your credit history needs repair, and you can set the process on track by picking the best available credit card. If you want to apply for a credit card with bad credit there are some options from Orchard Bank as well as from First Premier. The Orchard Bank Classic card offers an APR between 14.9 – 19.9% for an unsecured card and an APR as low as 7.9% for a secured card. You may have to pay an annual fee of around $39 to $59 which could increase in subsequent years.

Another balance transfer credit card that is worth considering is the Credit One Bank Platinum Visa which has an ongoing APR of 23.9%. You can also benefit from low fixed APRs below 10% from Applied Bank with a security deposit. When you apply for a credit card with bad credit you need to be aware whether the card has a fixed or a variable APR. This is important considering that a sudden hike in the interest rate could greatly upset your calculations. At the end of the day, you want to consolidate all your credit card debts into one credit card, and preferably pay an interest not more than 15%. This will help you rebuild your credit history.

Rebuilding credit with balance transfer credit card

If you apply for a credit card with bad credit with the intention of building your credit score, it is a very good idea to check what tools and assistance are available for the process. For example, credit cards from Orchard Bank are considered excellent as far as rebuilding credit is concerned, with reports going to all the major credit bureaus. There are secured credit cards which offer very low APRs, sometimes below 10%. Such a balance transfer credit card will help in drawing up a payment plan to erase your card debt. In fact, some credit card companies provide expertise in terms of creating a minimum monthly payment plan, where you can repay your debt over a period of time and get your credit score up to a more impressive mark. The first target should be to push it over 600 or even 650, allowing you to instill some confidence in lenders when you apply for credit cards or loans.

A good balance transfer credit card like Capital One Secured MasterCard allows you to get the credit limit that you need, without slapping a heavy processing fees or application fees. With new credit reform rules in place, one can expect the application fees to stay below $25 on most cases too, providing a decent credit line for you to work around with. There are tools as well to allow card holders to constantly check their credit scores and see the impact of the measures they are taking on their credit score. Apart from automatic reporting, some credit card issuers also provide guides to learn more about credit and the assistance of customer service representatives, who are knowledgeable enough to address queries and concerns is available too.

Picking the right balance transfer credit card

If you are planning to move all your outstanding balance to one card, you should be extra careful about the balance transfer credit card that you pick. When you pick these cards there are two categories of information which are very significant for you. You need to look at the different types of rewards that the card offers. These could be reward points, cash back offers, discounts on purchases or at specific retailers, etc. The second thing you need to look at is the various types of fees levied by the card issuer on the card holder. Examples include issuance fee, application fee, setup fee, cash advance and currency conversion fee, late fees and overdraft fees. The rewards should be good while the fees should be as less as possible.

Numbers you should take into account when you apply for a credit card with bad credit

When you want to apply for a credit card with bad credit you need to be careful of some numbers that are associated with the card of your choice. Transferring your balance from one credit card to another will only make sense when the numbers seem to fit in. For example, a good balance transfer credit card lets you save on the interest paid on the outstanding balance, at least for the first few months, after which the APR tends to increase.

One should ensure that the cost of the new credit card doesn’t exceed the savings it offers. For example, if you are paying an annual fee of around $59 on the new card, combined with a balance transfer fee of 3%, your additional cost could go above the savings you get with a 0% intro APR for 6 months. Therefore, when you want to repair your credit and rebuild it, a balance transfer credit card could be of use only when you pick it with caution.