“`html

Understanding Balance Transfers: A Guide by O1ne Mortgage

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding balance transfers. For any mortgage-related needs, feel free to call us at 213-732-3074.

Should You Do a Balance Transfer to an Existing Card?

Completing a balance transfer to a credit card with an existing balance can be beneficial, but it’s essential to review all your options and the offer’s fine print before making a decision. Often, people opt for a new balance transfer credit card with an introductory 0% APR offer. However, if you receive a low-interest balance transfer offer on an existing card, consider the terms carefully before proceeding.

Pros

• No new hard inquiry for applying for a new card: By transferring a balance to an existing card, you avoid applying for a new card.
• Potential interest savings: Your existing card may offer a lower balance transfer APR, allowing you to save on interest for several months.
• Known credit limit: With an existing card, you already know your credit limit.

Cons

• Transfer limitations: You generally cannot transfer a balance from one card to another from the same issuer.
• Potential to miss out on an intro 0% APR: New cards often offer 0% APR for a set period, which you might miss out on with an existing card.
• Increased credit utilization rate: Transferring a balance to an existing card can increase your credit utilization rate, potentially affecting your credit score.

What to Consider Before Using a Balance Transfer

Several factors should be considered before deciding on a balance transfer:

• Your credit limit and current balance
• The ongoing APR
• Balance transfer fees, balance transfer APR, and the duration of the fixed-rate interest period
• The maximum amount you can transfer
• The issuer of the card offering the balance transfer

It’s crucial to calculate how much money you could save after accounting for interest and fees. Exploring alternatives to a balance transfer, such as a debt consolidation loan or a debt management plan, might also be beneficial.

How to Complete a Balance Transfer to an Existing Card

Follow these steps to complete a balance transfer:

1. Decide how much you want to transfer and check the permitted transfer amount.
2. Understand the terms and fees, including the balance transfer fee and the duration of the promotional APR.
3. Initiate the transfer. Your card issuer will send checks to your creditors or to you to pay off the balances, typically within five to seven days.
4. Plan to repay the transferred balance before the promotional interest rate ends. Consider setting up autopay to avoid late payments, which could result in losing the promotional rate.

The Bottom Line

Using an existing credit card for a balance transfer can be a good idea, but it may not always be the best option. A new credit card with an introductory 0% rate, a debt consolidation loan, or a debt management plan might be more suitable for your financial situation. An existing credit card offers the advantage of a known credit limit and pre-approval, but the terms may not be as favorable as those of a new card with a 0% introductory rate. It’s essential to do the math and make an informed decision.

If you have any mortgage-related questions or need assistance, call O1ne Mortgage at 213-732-3074. We’re here to help!

“`