What You Should Know About Chase Balance Transfers Before Applying
There are limits to balance transfers with Chase credit cards, according to the company.
- Customers cant transfer more than $15,000 in credit card debt within any 30-day period.
- You cant transfer your balance from an existing Chase card to another card issued by Chase.
- Balance transfer requests take time. While Chase says that your debt may be transferred to your new card within a week, it can take up to 21 days.
- You need to continue making payments on your existing card until you are certain that the balance transfer has closed.
- Balance transfers wont earn you rewards points or cash back, if the card you are transferring a balance to offers them.
- There is no guarantee Chase will approve your balance transfer request. It might turn you down if you are past due on your existing card or if it believes you wont be able to repay whatever balance you want to transfer.
- Chase might also approve only a portion of the balance transfer you requested. Maybe you want to transfer $8,000 from an existing card, but Chase will only approve a transfer of $5,000.
Option No : Max Out The Balance Transfer Card Keep The Rest Where It Is
Say you have $10,000 in debt. From a mathematical point of view, if you move even half of it onto a 0% APR card and pay it off within the no-interest period, youre still in better shape, says Mike Sullivan, a personal financial consultant with Take Charge America, a national nonprofit credit counseling and debt management agency. If you cant transfer 100% of the balance, it doesnt negate the value of the balance transfer, he says.
On the other hand, with two accounts to manage instead of one, you could be kicking the can down the road, says Sullivan that is, if you dont have the discipline to follow through or keep from adding to the balance on the new or the original card.
As for credit score implications, Sullivan says not to worry much here. While maxing out the credit line of a new account can cause your score to dip, your total available credit is also increasing, which can give you a boost.
For example: You had an original credit limit of $20,000 and a balance $15,000, therefore utilizing 75% of your credit. If you open a balance transfer card with a credit limit of $10,000 and move that much of the original balance over, even though the new card is maxed, your total available credit has grown to $30,000. Therefore, youve lowered your overall utilization to 50%.
How To Initiate A Balance Transfer To A Chase Credit Card
If you already own a Chase credit card:
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Using An Existing Card
I would recommend you use an existing credit card if you can. If you use an existing card, youll already have an established history, and you can get some pretty good offers. Plus, youll already know exactly how much of your credit line you have available. On the downside, you may not have as many options as you think, and I would avoid using a card with an existing balance on it, as itll just make things messy.
If youre carrying a balance on the credit card and still want to use it for a balance transfer, there are a few things you should know.
- First, the way your payment is allocated has changed. It used to be that your payment would go to the balance with the lowest APR firstwhich would essentially lock customers into not being able to pay off higher balances until they paid off their promotional balance transfer rate. The CARD Act fixes this and allocates your payment to the highest APR first.
- Second, you want to make sure to read the terms very carefully when you do this. Some credit card companies will give you a great promotional rate, but then move the remaining balance to a very high-interest rate if you dont pay it off in full by the time the promotion ends. Read the terms and conditions carefully.
What To Look For When Applying For A Balance Transfer Card
When comparing balance transfer cards, consider:
- How long the 0% introductory period is
- If there is a balance transfer fee
- What kind of credit score you need to qualify
- Card terms after the introductory period expires
First and foremost, you want to give yourself ample time to pay your balance. Some cards offer a year and a half of intro 0% interest. The one thing you wont know until you are approved for a card is how big your credit limit will be. If you dont qualify for the amount you need, youll have to come up with a Plan B.
Check out our roundup of best balance transfer cards
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Calculating Your Utilization Ratio
You can quickly calculate your own utilization ratio, for all of your cards, and for each one individually.
Start by making a list of all your credit cards. Write down the credit limit and the balance of each credit card . Then, for each credit card, divide the credit card balance by the credit limit. Multiply by 100 to convert the answer to a percentage.
Any credit cards with balances over 30% could be affecting your credit score. Work to reduce those balances for a better credit score.
Ready For A Credit Card Balance Transfer
The final question to ask is: How can you be sure youll get approved for the credit card that will bring you the most benefits?
As mentioned, your credit score impacts what interest you pay. So it could be a good idea to work on improving your credit before you apply for your new card. Click below to find out more tips and tricks!
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What To Look For In A Balance Transfer Card
Balance transfers can save money. Say you have a $5,000 balance on a credit card with a 20% annual percentage rate . At that rate, carrying that balance and paying $250 a month would require 24 months to pay off and cost $1,134 in interest. After securing a 12-month 0% balance transfer on a new credit card and moving the $5,000 balance, the cardholder gets a year to pay it off with no interest and just a fee to transfer the balance.
But details and surprises with these transfers are numerous. After the transfer, for example, you still have to make the minimum monthly payment on the card before the due date to keep that 0% rate. And pay attention to the interest rate. Does the new card have a regular interest rate thats higher than the interest the balance incurs on your current card?
Similarly, a default under any of the rules of the cardholder agreementsuch as making payments late, exceeding the credit limit, or bouncing a checkcan make the interest jump to a penalty rate as high as 29.99%. The 0% rate is usually valid for 12 or 18 months, sometimes more. Can you pay off the transferred balance during that period? If not, what interest rate kicks in afterward?
What Happens If I Still Have A Balance After The Introductory Apr Period Expires
While we encourage you to try to pay off your entire balance before the introductory APR period ends, sometimes that’s not always possible. If you can pay off the balance in a few months, that’s generally your best course of action. But, if you’re worried about the new interest rate, it’s helpful to do the math and find out if the interest you’ll accrue will be less than the cost of another balance transfer. Alternatively, you could consider a debt consolidation loan if you won’t be able to pay down your balance within another balance transfer card’s introductory period.
It’s possible to transfer your remaining balance to a new balance transfer card, but this strategy can be risky. Not only will you take a ding on your credit report when applying for a new account, but you also run the risk of getting denied or not being approved for the amount you need. If you are approved, you’ll also have to pay another balance transfer fee. A balance transfer card works best when it’s used as a short-term debt solution strategy — continuing to transfer balances and pay fees can encourage unhealthy credit habits and may ultimately cost you more money in the long run.
It’s always preferable to create a debt repayment plan to pay off your balance during your initial introductory period, if possible.
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Who Should Consider A Balance Transfer
It may be time to explore a balance transfer if youve piled up balances that you cant pay in full each month. If youre carrying a balance, a lower interest rate is likely to save you money.
You might also consider a balance transfer if youre struggling to manage multiple due dates. Its easy to overlook a credit card payment due date when you have several to make each month. Yet doing so repeatedly may impact your credit score. If you find yourself missing payments, you might benefit from the consolidation a balance transfer can offer.
Why Would I Need To Transfer Money From A Credit Card To A Debit Card
Sometimes you might need a small sum of money but you do not want to take out a formal loan. If you want to clear an overdraft or borrow a small sum of cash, you can use a money transfer credit card to move credit into your current account. Bear in mind that you are borrowing money to pay off an existing debt, and this can become a dangerous habit. If you are having problems with your cashflow and need help with your finances you can contact a charity such as StepChange or National Debtline who will give you debt advice for free. Never take on more debt if you cannot afford it or if you have no way of being able to pay it back.
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What Happens When The Interest
It is best to pay off the amount in full before the 0% term ends. That is because the interest rate on the outstanding loan from your credit card could rise to 23%.
If you are using the money transfer credit card to help you pay off a loan or mortgage, make sure you won’t be incurring any early repayment penalties. Many lenders want you to pay off a specific amount of the debt each month. So if you suddenly had a lump sum of cash allowing you to pay off a larger proportion, which would clear the debt quicker, just make sure you won’t be charged a penalty fee.
To avoid paying interest, don’t spend on your new money transfer credit card, unless it also offers a 0% interest purchase period, or you’re sure you can repay your spending in full each month.
Problems Caused By More Debt
A balance transfer will only work in your favor if you handle the process responsibly. If you open a new credit card account, transfer your debt to it and then continue to take on new credit card debt each month, you could create serious financial problems. This type of behavior could also hurt your credit score.
Mounting credit card debt could make it difficult to keep up with your payments down the road. And since 35% of your FICO® Score comes from your payment history, late payments may cause major credit score damage. may also come with other consequences too, like late fees and even account closure.
If you continue to rack up credit card debt, your credit utilization level may start to creep upward again as well. Higher credit utilization ratios are never positive in terms of your credit score.
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Will You Pay Interest On New Purchases With A Balance Transfer Credit Card
Typically, credit cards have different APRs for purchases and balance transfers.
If you complete a balance transfer without a low introductory offer on new purchases, you will not be able to avoid paying interest on those purchases unless you pay your entire balance in full by the due date. Before you begin putting new charges on a balance transfer credit card, be sure to read the terms and conditions to understand the consequences of making new purchases.
Option No : Consider Applying For Another Balance Transfer Card With A Different Issuer
If you strike out on a balance transfer deal with your existing card issuer, you can try your luck with another issuer , but there is a downside to applying for numerous cards. Hard inquiries especially more than one in a short period of time can harm your credit and may even risk your ability to get approved for the new card, says Sullivan.
If youre not in the market for a big loan any time soon, such as a mortgage, that credit hit may be worth it. Hard inquiries can knock your score down by about five points each time, but the impact only lasts a year. Plus, with the added credit lines of a couple new cards, plus the eventual deletion of your debts, you should find your credit score will actually increase.
If you do end up being approved for two new balance transfer cards, that will allow you to split your existing debt between them. Again, how you split up the transferred balances is up to you you might put more on the card with the longer introductory rate so you have extra time to tackle it. Or, you might do an even split so youre not maxing out either cards utilization. No matter which route you take, the more important goal is to complete both payoffs without incurring further interest charges. In that case, you should try to make sure at least one of them is a no-fee balance transfer card. Otherwise, you may get socked with two balance transfer fees.
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How To Do A Credit Card Balance Transfer
How do credit card balance transfers work? After getting approval for a card with a 0% interest balance-transfer offer, find out whether the 0% rate is automatic or depends on a credit check. The next step is determining which balances to transfer cards with high interest rates should come first.
Next, calculate the transfer fee, which is typically 3% to 5% . Is there an amount cap on the fee? If not, that can make transferring larger balances worthwhile. Also check the on your new card before you initiate a transfer. The requested balance transfer cannot exceed the available credit line, and balance-transfer fees count toward that limit.
Make Sure Your Credit Score Is Where You Want It
Your credit score and credit report will be important factors credit card companies will consider when evaluating your application for one of these balance transfer cards.
Your application for a balance transfer card may be rejected if the credit card company sees you have a rocky payment history or that youve previously filed for bankruptcy.
Before you apply, check your credit score. offers free credit score checks. Knowing where you stand is essential in determining your next steps.
Is your number disappointing? Thats OK you dont have to just accept it. A credit repair loan through a company like Self Lender could help build up your payment history and quickly give your score a boost.
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How To Transfer A Credit Card Balance In 3 Simple Steps
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Does A Balance Transfer Mean Youre Closing Your Old Account
Balance transfers do not automatically close an account. If you want to close a credit card account after you transfer the balance from it, you need to contact the creditor to do so. But you may want to keep the card open, as closing cards has the potential to negatively impact your credit rating. The old card can be an emergency backup card, but be careful not to use a balance transfer to rack up more debt.
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How Do You Transfer Balances Onto A Credit Card
Once you have selected either an existing credit card or a new credit card to transfer your existing debt to, you will need to arrange the transfer with your balance transfer credit card issuer, who will need details about the account you are transferring funds from.
Some balance transfer credit cards will allow you to complete this transaction online.
What The Rate Goes To After The Promotion Ends
This is criticaland as you can see above, my promotional rate will revert to 20.49% after the promotional period ends.
At this point, whatever balance is left over goes to this rate, and I can either pay it off or transfer it to another card.
Keep in mind that banks pay attention to people who flip balances around constantly.
Theyre whats known as rate surfers and will eventually see no promotional offers come their way since they cost banks money in the long-run.
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