Should You Use a Balance Transfer for Credit Repair Purposes?

| September 26, 2011 | 0 Comments
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One of the most interesting points about credit repair is that old bills from a credit card can be easily paid off if they are transferred to another card. This could work to make it easier for debts to be cleared so a person’s credit rating can improve. This credit repair option is not without its risks though.
A balance transfer works in a simple manner. First, a person will take the balance that is on a credit card to another card. This new credit card will feature a reduced interest rate on the transferred amount of money. This rate could be worth zero percent in some cases. Either way, it will be lower than what was originally on the old card. This new rate will work for a certain period of time.
The person will then have to pay off the credit card payments before the reduced or zero interest period ends. It could take ninety days for this period to end on some cards. The balance on the card will go to its normal rate after this period ends.
This is often a useful option for handling credit repair needs. It works to reduce the likelihood of additional charges being added to one’s name. It can also be used to help with clearing up enough space on one’s credit line. This will help to easily improve a credit rating.
This is not without its problems though. For example, this credit repair option will involve a fee in some cases. This can be a few percentage points of the value of the money that was transferred from one card to a new card.
An annual fee may be applied to some of these cards as well. This is especially the case for balance transfer cards with no interest for a certain period of time.
There is also the amount of time that is open for handling payments with little to no interest. It can take ninety days in some cases for the card to go to its regular rate. Therefore, a customer will have to hurry up to pay everything off before more high level interest can be added.
These are big points that need to be seen when finding a balance transfer plan for credit repair needs. This can work as long as the balance transfer is paid off in a reasonable amount of time.

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Category: Blog, Credit Resources, Debt, Improving Credit Score

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