Getting a balance transfer, which is basically paying off one card with another, is the easiest and fastest way to lower the interest on your card, but it may not be the best way, as we'll see later. To do this, you need another card, and there's nothing wrong with that (unless you simply must abuse it.) Of course, cards with no annual fee are best, but even a small annual fee is fine if you're saving more money anyway. This is easy to do because there are so many credit card offers with low or no interest rates these days. Here are some important things to remember:
- Depending on the credit card company's rules, you can transfer your balance over the phone, online, or by sending in a form. This last one takes longer, but if you're in a hurry, you could use a fax, so give yourself more time. On new card applications, this isn't usually a problem, since they'll ask you if you want to do one anyway (or you can wait until your card is activated if you like.)
- Most balance transfer offer periods start when the card is activated, not when the transfer is made. Once this period is over, which is usually about 6 months, the standard balance transfer rate applies to the rest of the transferred amount and any new transfers.
- Later balance transfers can still be used to get rid of cash-out interest that may have been "sandwiched" between two purchases. In the long run, it's better to learn not to get cash out, but this will help with those sudden urges.
- Transferring a card's entire balance lets you use the "interest-free days" or "grace period" feature on your original card. (Look at Report.)
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