Balance Transfer Credit Cards
The simple reason to apply for a balance transfer card is to saves on interest when you transfer balances from higher rate credit cards.
If you carry a balance on your existing credit card, you can consolidate them all on one balance transfer credit card that offers 0% interest for an introductory period. The main trade-off is a card with no balance transfer fee (usually 3% – 5%) or one with a 0% intro period. If it’s going to take awhile to pay off your debt, look for the longest 0% period possible.
Compare Balance Transfer Cards
It is always a good idea to compare balance transfer cards. The Discover Card has a great website with a balance transfer comparison chart. You can compare cards from Chase, Discover, Bank of America, Citi, Capital One and Visa cards. Make the right decision the first time around.
Credit Card Company Brands
Here are the top offers to look for when considering a balance transfer credit card :
- Some of the best balance transfer cards offer 0% Introductory APR for 18 billing cycles for transfers made in the first 60 days
- Balance transfer fee of either 3% of the amount of the transfer or $10 (whichever is greater) applies
- No annual fee’s
- No foreign transaction fees
Things to watch out for if you transfer your balance
- Interest rates: most balance transfers offer limited time interest rates. (example: 0% for 6 months). Then once that period is over it usually jumps to a high interest rate. Make sure that interest rate fits your pocket.
- Transfer limits: you’ll need to transfer an amount that’s within the credit limit on your new card, minus the fee.
- Credit card providers often try and sell you fraud protection and lost card services. The benefits may not be that worthwhile as you are protected by law already to some extent.
- It’s usually recommended not to make any purchases with a credit card to which you have made a balance transfer.
What is a Balance Transfer?
A balance transfer is where you get a new card that pays off existing debt. The balance transfer can be on a traditional credit card or store card. Most often s transfer will be at a rate of 0%. Now this means you just left and high interest rate for a zero percent rate. Also now you stop paying interest for a set limit of 6 months to lets say 24 months.
This can give you a big break on the interest and give you time to save up some money to eventually pay off the entire balance.
Most balance transfer cards will charge a small fee when you make the transfer. Always check what the fee will be. Its most likely the fee is based on the total amount of money you will be transferring or quite frankly borrowing.