How to make a Balance Transfer Offer Work for you
As credit card companies begin easing up on their credit card practices, you may begin to see a steady trickle of credit card offers entering your mailbox. And, along with credit card offers come balance transfer offers.
Balance transfer offers are typically used to transfer higher balance cards onto another card with a more attractive rate. Many times, credit card companies offer low introductory or balance transfer rates, thereby saving the customer from hefty finance charges.
Finding a good balance transfer offer may take a bit of work, but there are plenty of credit card companies out there who are competing for your business.
How a Balance Transfer Works
If you are paying too much in interest charges on your debt then you may want to consider the advantages of credit card balance transfers.
Simply find a credit card that is offering a special balance transfer rate and consolidate your other, higher interest debt onto the lower interest rate card. Pay close attention, however, to the term of the promotional rate, as well as the balance transfer fee, as both of these factors could impact your debt.
Many times, it pays to pay off your debt during the introductory, or promotional, period. However, if you are unable to pay off the debt during that time, pay close attention to the card’s standard APR, as it may be quite high.
Balance Transfer Features to Watch for
A good balance transfer offer will have three, main components:
- A long introductory period
- An attractive introductory rate
- A low balance transfer fee
Most balance transfer offers have an introductory period of between six to 12 months. Depending on your financial goals, look for the introductory period that best suits your needs.
A balance transfer offer often comes with a great, low introductory rate. For example, it is not uncommon to see 0% introductory rates.
Finally, a good balance transfer offer will have a low balance transfer fee. Most balance transfer fees range from three to five percent of the balance transferred, so pay close attention to this fee to ensure that it makes good financial sense to complete the balance transfer.
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