How should you choose the right balance transfer card?

Answered on September 25, 2010
Updated on September 25, 2010
The content is accurate at the time of publication and is subject to change.
James Williams James Williams
There are a lot of promotions going on from many credit card companies competing with each other to attract customers to their credit cards. Balance transfer is one of the biggest incentives offered by many of the credit card issuers. However, it is not advisable to blindly go for a balance transfer without checking out the benefits. The first thing to check before going for a balance transfer is what the initial interest rate on the card is. There are many credit card which usually offer a 0% initial APR which is quite beneficial especially if you have an outstanding balance and you are unable to pay it off because of the constantly accumulating interest. The next thing to check for is what the initial term is. Even if the initial APR is 0% it wouldn`t be of much use if the initial term is very short and less than 6 months. Another thing to check is if the initial term varies according to the credit rating of the customer, and if so what it is in your case. In order to decide whether or not to go for a balance transfer you have to know what the initial rate and the initial term is. The next question to ask is what the final annual percentage on the card would be once the initial term is over. This is the rate that is going to stick with you eventually and hence it is quite imperative that it is not way too high. If that is not the case, you will soon find yourself paying high interests once again, undoing the initial benefits. Another thing to find out before going for a balance transfer is about the credit limit of the card. If the credit limit of the card is very less, then your outstanding balance will reach the credit limit very easily which will affect your credit rating adversely. Hence, the credit limit on the new card should be high enough as well. You must also find out if there are any rewards being offered on the credit card. Almost all credit cards offer rewards such as cash back, discounts, flyer miles or loyalty points. Hence in your excitement to get a 0% balance transfer, you might miss out on the rewards which will be very helpful for making savings after some time. Hence the card you go for should be a good prospect even in the longer run.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

User Comments about This Question


When you first face credit card issues, some phenomena can come as a bit of a shock. For example, balance transfers may seem unintelligible, but in fact they are quite easy to understand. You have a balance on card A and then you transfer it onto card B. Cards for balance transfers usually have low intro rate offers on balance transfers, so for the first time you may have even a 0% APR offer. That will allow you to pay off some or all of your balance with little interest and save quite a lot. So that is quite an option. Note that balance transfer cards with attractive low rate intro offers...
Unfortunately, you won't be able to transfer the balance of one Wells Fargo credit card to another Wells Fargo credit card as balance transfers between two cards of one issuer are not allowed. You will need to apply for a credit card from a different issuer.
Unfortunately, you won't be able to transfer the balance of one U.S Bank credit card to another U.S Bank credit card as balance transfers between two cards of one issuer are not allowed. You will need to apply for a credit card from a different issuer.

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