Balance Transfer Credit Cards
Balance transfer credit cards will enable a person to consolidate all the credit cards debt into one card.
Through the process of balance transfer credit cards one can save a lot of money on APR interest rate. This process in-turn helps the consumer in gaining the control regarding finances through simplified method of paying and also enables you to save the money of the consumer if the balance transfers credit cards provide other perks or competitive interest rates. Therefore, the most important criteria to shop for balance transfer credit cards are the rate of interest and also a nice grace period in order to pay down the balance with no added fee involved.
Top Pick
Capital One® No Hassle MilesSM Rewards
- Click “APPLY HERE” to apply online or call (866) 592-0808
- 1 mile per dollar spent on purchases up to $1,000 each month
- 2 miles per dollar above $1,000 each month
- No limit on the miles you can earn and miles don’t expire
- 0% APR on purchases until May 2010
- No annual fee
| Intro AAPR | Intro APR Period | Regular APR | Annual Fee | Balance Transfers | Credit Needed |
|---|---|---|---|---|---|
| 0% on purchases* | until May 2010* | 13.90% (V)* | None* | Yes* | Excelent Credit* |
Managing your Credit Card Debt with Balance Transfers
Balance transfers are a great way for consumers to manage their credit card debt, but they are also often misunderstood.
In addition, many credit card companies are changing their terms regarding balance transfers in an attempt to fight back against the impending credit card legislation, recently signed into law by President Obama.
It is, therefore, more important than ever to consider all of your options regarding balance transfers to ensure that you are making the best financial decision.
How to Appropriately Use Balance Transfers
Many consumers use balance transfers to pay off debt. As a result, many creditors offer customers special “promotional rates” to interest them into using balance transfers. However, there is much more to balance transfers than just the snazzy promotional rate.
Of course, you can find an excellent deal on a balance transfer. However, like any other kind of loan, you must educate yourself so that you won’t be caught off-guard regarding the terms and conditions.
You may choose to use a credit card balance transfer offer to transfer other credit card debt, an auto loan, a personal loan or even medical bills. The allure of balance transfers are certainly the low promotional interest rate. Whatever reasons you have for using balance transfers, you will need to understand the many aspects of balance transfers.
Important Balance Transfer Factors to Consider
There are a variety of factors to consider when searching for balance transfers:
- Introductory Rate – The introductory rate is the rate advertised by the creditor to the consumer. All debt that is transferred through the balance transfer offer is eligible for this special introductory interest rate. Many creditors offer a 0% introductory rate, while many other creditors offer attractively low introductory rates.
- Introductory Rate Period – The introductory rate period is a very important factor to look at when deciding on balance transfers. Many introductory rate periods last about 12 months, although it is not uncommon for creditors to reduce this time frame because of tighter credit card regulations. Expect many credit card balance transfer offer to last about six months in today’s credit climate.
- Interest Rate – It is important to look at the actual interest rate of the credit card, as it is the rate you will begin paying once the balance transfer’s introductory rate period has ended. Many consumers fail to notice this default interest rate amount and subsequently are surprised with a high interest rate once the introductory period has ended.
In addition, unlike a few years ago when it was quite simple to obtain another credit card balance transfer offer when the promotional rate on the current one expires, it may be difficult to find another offer when the time comes. In other words, don’t assume that you can obtain another balance transfer offer down the road; instead, make a point of finding the best offer now!
- Balance Transfer Fee – The balance transfer fee is perhaps one of the most important factors to consider when searching for a balance transfer offer. The balance transfer fee is the rate charged by the creditor to process the balance transfer. This fee was traditionally about 3% of the cost of the balance transfer, although most creditors had caps of about $75. In other words, your balance transfer fee would equal either 3% of your balance transfer amount or $75, whichever was less.
Now, however, many creditors have begun charging up to 5% for their balance transfer fees and have eliminated caps. Because of this, it is now more important than ever to carefully consider all of the associated costs of balance transfers. Transferring a balance of $10,000 could cost you as much as $500 in balance transfer fees!
Balance transfers are practical, convenient solutions to managing debt. If used properly, they can help us pay down our debt. They can also afford us the luxury of paying just one payment each month, instead of several payments to several creditors.
Most balance transfers include checks which allow you to simply write a check to your other creditors to pay off your debt and transfer it over to your new credit card. Many creditors offering balance transfers may also complete this transfer for you.
Balance transfers are just one of the many benefits of credit cards; however, like any other financial decision, it pays to do your homework when choosing which balance transfer is right for you.
