See More of Your Money by Refinansiering av Kredittkort

When your finances get out of control, it can become so overwhelming you may despair that you will never be able to get things back under control. It is easy to begin to feel this way and jump into concentrating on reducing your debts so much that you forget to enjoy your life.
There is always support available for you if you are struggling to make your repayments. The first thing to do is check how much you owe and what options there are available to you. You may be able to refinance your debts, or if not, you can contact each of the companies you owe to discuss your options. 
The options each credit company offers will differ, so do not assume that because one company offers you an alternative way to repay, you will have the same offer as every other company. Below, we will focus on refinancing, what it means, how to refinance, and some risks of refinancing to consider. 

What is Refinancing?

There are ways that you can ensure that you are able to reduce your debts and still enjoy your life without taking on a second job or winning the lottery. Refinancing your debt is a process of moving your debt from the credit account you currently have to a different source with a more favorable offer. 
Refinansiering av kredittkort is one of the easiest processes to complete and the most effective in reducing your monthly outgoings. The interest amount on most credit cards is among the highest interest rates charged for credit accounts. Loan interest rates are usually considerably lower. 
When applying for a credit card, you will be given a credit limit, which is the amount you can spend on the card, and an interest rate. Unlike a loan, where the interest rate is fixed for the entire term of the loan, a credit card will have a variable interest rate.
Variable interest rates mean that the percentage of interest that can be charged can be changed at any time, provided the credit card company notifies you in line with the terms and conditions of your card. Several factors can influence interest rates, and there is nothing you can do to change them. 

Benefits of Refinancing

The benefits of refinancing your credit card include reducing the monthly repayment for the card. As you will be moving the credit balance to a new card, you can look for offers that will lower your monthly repayments. 
Many credit cards offer introductory offers when taking a new credit account with the company, which include a 0% interest rate on balance transfers. Balance transfer is another term for refinancing and is the process of transferring the balance to a new credit card. 
If you have a 0% interest period on your new card, you will not pay any interest during this period on the full balance you have on your new card. However, if you make purchases with the new card, you will be charged interest on that amount. 
The benefit of the 0% interest is that you can calculate how much you will need to pay each month to pay off the balance in full by the end of the interest-free period. If you are not able to pay the balance in full, you can either begin to pay interest at the end of this period or transfer your lower balance from that card to another that offers 0% interest on balance transfers. 
The process of moving the credit balance from one interest-free card to another should not be detrimental to your credit file, provided you close the previous accounts. There is a risk that some people will clear the balance of the old card, then use it again for purchases and begin the process again. 
The best thing to do is to transfer the balance, and after receiving confirmation the old card has been cleared, close the credit card with the company and destroy the card. Removing the temptation to spend on that credit card again will help to avoid this situation.
Another benefit of refinancing your credit card is that with an interest-free card, 100% of the repayments you make will be made by clearing the balance of the card. With an interest-bearing card, the interest charged each month is paid first, and anything remaining from the payment you have made will go toward the outstanding balance. 
If you only pay the minimum payment each month, it will take you years longer to repay the balance than if you make a higher payment. There are calculators available online if you decide not to refinance, which will show you how quickly your card will be cleared depending on how much you can afford to repay each month. 

How to Refinance

If you are interested in refinancing your credit card, the first step is to see which offers you have available. You can review information on websites that specialize in credit card refinancing, such as besterefinansiering.no/refinansiering-av-kredittkort. 
When refinancing your credit card, you should always look for a new card that offers the longest interest-free period. The longer the interest-free period, the lower your monthly repayment will need to be to pay the balance off before interest is added. 
You can, of course, repay the balance in full before the interest-free period ends if you would prefer, and no penalty will be charged for an early repayment. 
You can use comparison sites to see which credit card has the longest interest-free period and how likely you are to be approved for the cards you are interested in. There is a risk with applying to transfer the balance of the card that your new card will not have a high enough limit to cover the balance of your old card. 
If this is the case, you can still proceed with the new card application and transfer the balance up to the maximum limit for the new card. Transferring a partial balance will leave you with two monthly repayments, as you will be charged a set minimum payment on your new card. 
However, this situation is not always negative. If you are able to clear the majority of the balance on the interest-bearing card, your monthly interest charge will decrease significantly. If you continue to make the same payment as you previously made minus the new card’s minimum payment, you will reduce the balance significantly quicker. 
You may be able to repay your old card in full in a short period, then close it and repay only the interest-free card from then on. Repaying the interest-free card over the full period should reduce the amount you need to repay each month and significantly reduce the length of time it will take to clear, giving you more money each month. 

The Cost of Refinancing 

There is a cost to refinance your credit cards, which will apply every time you transfer a balance from one card to another. The new credit card company that you are accepted by will charge a fee for the transfer. The fee will be a set percentage amount of the balance that you are transferring.
The fee will be added to the balance of the card, meaning the maximum amount you can transfer from your old card will be the maximum limit of your new card minus the transaction fee. The credit card company will work on the assumption that the card will be repaid in full, and without charging a fee, they will see no benefit or profit from you opening the card. 
If you do not repay the card balance, including the transaction fee, in full before the interest-free period ends, you will begin to pay interest on the outstanding balance. It is, therefore, the best idea to begin applying for a new interest-free card a month or two before the old one expires. 
It may take a short time for the new card to be approved, processed, or issued. So, rather than risking a delay and interest being added, having the card ready to transfer is best. Paying a single transaction fee each time an interest-free period ends until your balance is cleared will be significantly cheaper than the interest you would otherwise be charged. 

Risks

As mentioned above, there are risks associated with refinancing your credit card. You may not be accepted for a new card; a declined application can impact your credit score. You can reduce this risk by using a company that completes a soft credit check before applying. A soft credit check will show you if you will be accepted without affecting your credit score. 
You also risk making your financial situation worse by not canceling previous cards or beginning to spend on them after taking the new card. The amount of borrowing you have and the number of credit accounts you have will impact your credit rating and can be detrimental to you being approved for credit in the future.
It is best to cancel the cards as soon as they are clear and have only one active credit card in your name. It is especially important to keep the number of open cards to a minimum if you may need to transfer the balance of your card again in the future.