Best Credit Cards for Balance Transfers
What is a balance transfer? Simply put, it is the transfer of the outstanding balance from one credit card to another. This is an excellent way to people with credit card debt to save on interest by moving their debt to a credit card that offers lower interest rates, has fewer penalties but greater rewards such as purchase points or travel miles.
So if you’ve splurged a little too much on Christmas shopping or taken a fantastic vacation recently and are looking to gain time by consolidating all your debt in one place or rather one credit card, but have no clue which one you should pick, you’ve come to the right place.
There are four main things anyone should keep in mind, weigh and compare when in the market for a new credit card for the balance transfer, they are:
- Introductory Balance Transfer Annual Percentage Rate
- Balance Transfer Introductory APR Period
- Ongoing Annual Percentage Rate
- Balance Transfer Fee
- Annual Fee
Introductory Balance Transfer Annual Percentage Rate (APR):
As a ploy to bring in more customers, banks have long offered credit cards with promotional lowered annual percentage rates for people looking to transfer their balances to escape standing debts. The first thing to consider when looking for a new credit card to pay off existing balance is to look for a credit card that offers zero percent introductory APR. Getting a new card with already a high percent APR and no first promotion is just plain idiocy unless you can’t get approved. That is a different story altogether, in which case opt for one which gives the LOWEST rates when compared to others. Do your research.
Balance Transfer Introductory APR Period:
The second thing to keep in mind and weigh is the time duration for which the introductory rate is good for. The chances are pretty slim of the lowered interest rates being permanent, so find a card that gives you the longest duration of zero introductory rates. This is important because it controls the amount of time you have to pay down high balances without incurring additional interest charges.
Ongoing Annual Percentage Rates
Don’t just be blinded by the zero interest introductory APR. Remember that after the promotional period is over, you will be liable to pay interest on your balance according to the ongoing APR. Credit card companies have no limit on the interest charged. It can be as low as 10.99% or as high as 20 or even 21%. It all depends on your credit history and score. Don’t get a new credit card if you plan on carrying a balance after the introductory period, and if you must, then choose a company that offers the lowest rates.
Balance Transfer Fees:
Another thing to pay attention to when shopping for a credit card to take care of existing debt by balance transfer is that most of these transactions are not free. Credit-card companies and issuers charge fees that usually amounts to 3 to 5% of the total balance you transfer. It is important because it can cost you a decent sum of money. Even some of the best credit cards for balance transfer list this fee. So consider, depending on the card you choose, whether the balance transfer fee is worth the months of interest savings or not.
Don’t just apply for the first card with the lowest annual percentage rates they charge. Consider and weight other features and options, benefits and detriments of all, for example, annual fees applicable to the original time frame, rewards, programs, and points.
Always read the fine print, weigh in your credit history and score, never make assumptions that you may qualify for the best rates, compare other offers and options, and remember, make your payments on time and don’t go over your credit limit to stay out of that never ending debt hell.
Thank you for your interest Best Credit Cards for Balance Transfers post.