Here are a few things to consider with every balance transfer offer before you apply:
1. What is the transfer APR?
The annual percentage rate associated with balance transfer offers is probably the most crucial aspect to consider when searching for the right balance transfer offer. Obviously you want to be able to take advantage of a transfer rate that is lower than the APR your balance is currently at, because the whole point of transferring balances is to lock your existing credit card balances in at a lower rate in order to save on interest. With all the promotional rates of 0% for 12 months , or 3.99% until paid in full - it is definitely important to consider the balance transfer APR before going ahead with the transfer.
2. How long is the promotional APR good for?
Another important thing to consider before transferring card balances is how long the promotional APR is good for. The vast majority of balance transfer offers will offer promotional periods of anywhere from 6 to 15 months for low rate offers. Some even offer rates as low as 2.99% until the balances are paid in full . One should consider how long they think it will take to have the transfer paid off when choosing a transfer offer. If it is an amount that can easily be paid off within 12 months or so, it would be in your best interest to take advantage of a lower transfer rate with a promotional period. However, if it is a balance that will take years to pay off, one may want to go with a long term balance transfer offer to avoid having to move balances around as soon as promotional periods expire.
3. What rate will the promotional rate escalate to after the introductory period?
One of the ways that credit card companies make money on balance transfer offers is by banking on customer’s to not have the full balance paid off during the promotional period. In most cases, once the promotional period has expired, the remaining balance will be subject to the standard purchase rate of the credit card, though this is not always the case. It is important to make sure that you are aware of what the rate will be when the promotion expires, or to to have a plan to transfer the balance to another credit card.
4. Does the card have an annual fee?
Another way the credit card companies make money on balance transfers is by charging an annual membership fee for the card. Nowadays, there is no reason to balance transfer to a card with an annual fee as there are several card issuers that offer balance transfers with no annual fee cards. The whole point of transferring credit card balances is to save money, so if a large annual fee is required to do the transfer, it may not always be worth it.
5. What is the balance transfer fee?
A few years back it was very common to find balance transfer offers that had no transfer fee associated with them. In the last year and a half, however, these no transfer fee cards come few and far between. It’s most common now for a credit card company to charge a transfer fee of about 3% of the balance that is being transferred - though many issuers will put a cap on the fee amount of anywhere from $75 to $250. Again, the whole point of transferring balances is to save money, so you will want to do some calculating to ensure that paying the transfer fee makes sense in your situation. There are still some card issuers that offer balance transfers with no transfer fee, so do some looking around on card comparison sites to see if there are any promotions to take advantage of. About
The Author...
To compare current balance transfer credit card deals side by side, head over to Cardsense.net. You can easily look over all balance transfer credit card deals, review card details, and apply easily online. Offers now updated 4 times a day!
Read More From James Flynn
|
