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What is a balance transfer?

November 2, 2020 Johnny S. Fox Debts have become a struggle for many households. The COVID-19 pandemic has created a recession that is sweeping across the globe. More and more people are finding themselves with more credit card debt than money in savings. The reality is that it is taking longer for most people, especially cardholders, to pay their debts.

How does a balance transfer work?

Balance transfers are transactions that occur when a cardholder moves all or part of his debt from a credit card to a balance transfer card. Most balance transfer credit cards come with a 0% interest offer for a limited period. This could save you money on interest payments and use the money to settle your debt faster.

Should I do a balance transfer?

Balance transfers have both advantages and disadvantages. If wisely used, balance transfer credit cards will help you pay off your debt in time. As you read on, this post will discuss both the pros and cons of balance transfers in detail. Thoroughly consider all the pros and cons before deciding on whether to apply for a balance transfer or not.

What is a credit score?

A credit score is a three-digit number that is obtained after an assessment of your credit file. It normally ranges from 300 to 850. 850 being the highest possible score. It estimates how likely you are to honor your debt obligations. Credit- scoring companies extract information from your credit reports and use mathematical formulae to calculate your credit score.

What is a good credit score?

It is simple, the closer your credit score is to 850, the more deserving you are of credit. A higher credit score increases the chance of your online loan being approved. It also earns you favorable credit terms like a lower interest rate. If you are applying for an insurance cover, you'll enjoy reduced premiums. Using the FICO scale, a good credit rating starts from 670 and goes up to 739.