Checklist to decide whether you should go for the balance transfer card
A balance transfer credit card is offered by card issuers to attract customers of other credit card companies. However, not all balance transfer offers are necessarily good. It is important to have your calculations in place before you choose to go for a balance transfer credit card. Here are a few things you must double check in order to decide if a balance transfer credit card really offers some benefit.
Does the card levy a lot of fees?
Fee is one way in which credit card companies earn a lot of revenue apart from the interests earned on card debt. So, the benefits that a balance transfer card offers you can vanish if you are not aware of the different types of fees charged. For example, a high late fee or over the limit fee is not desirable. But what you must surely check is whether there is an annual fee and if yes, how much. An annual fee of over $50 only adds to your outstanding debt. Most credit card companies charge a balance transfer fee which is around 3% of the balance transfer amount. You must take this additional cost into account at the time of taking a call. Some credit cards may charge a bigger balance transfer fee as well.
Introductory period long enough for your credit score
Some credit cards may offer introductory periods as long as 21 months but it might not necessarily be true in your case. The introductory period varies based on your credit score in most cases, which means that if you have an average credit score, the introductory period might be shorter than 12 months, which could really lay all your plans to waste. So, before you apply for a balance transfer card, you must check what the introductory period will be for someone with your credit score.
Initial and final APR should be impressive
For you to go for a balance transfer credit card, it is important that the new card offers an impressive initial and final APR. Good balance transfer credit cards usually offer an introductory rate of 0% during the introductory period after which the APR will go up. The final APR shouldn’t be too high and should be less than 20% if you are to even consider taking the credit card. If the final APR is high, it could represent a risky proposition especially in the scenario where you are unable to repay your outstanding credit card debt before the end of the introductory period.
The card should offer good savings and good credit limit
Transferring your balance from one card to another is not something you should do often as that will affect your creditworthiness. So, if you plan to go for balance transfer, make sure you pick a card that offers a good credit limit. Higher the credit limit, better it is for your credit score. The card should offer other credit card rewards as well so that you can make impressive savings.
Latest Balance Transfer Cards Guides
After requesting a balance transfer, it usually takes about 14 days before the actual transfer is completed. However, receiving the long-awaited message from the card issuer that your funds have been successfully transferred is not the final step. After this, it is very important not to forget about some important things you better do so […]Continue »
Once you understand you are carrying balances on one or several credit cards under huge interest that you cannot pay off quickly, it may be wise to consider transferring those debts to a new balance transfer credit card. Most such cards come with a 0% intro APR on balance transfers for 6-21 months, which can […]Continue »
If you have one or even several credit accounts with considerable balances and huge interest, probably, considering a balance transfer to consolidate those debts is the best way out. But before you apply for a balance transfer credit card, it’s not out of place to assess all possible pros and cons. And, first of all, […]Continue »
Once you decide to apply for a balance transfer credit card in order to consolidate all your debts, get lower interest rates or earn more rewards, you most likely begin to wonder how to accomplish the whole balance transfer process and benefit from it. Let’s start with the basics.Continue »
Balance transfer card is definitely the best credit card for reducing your debt. Such a card allows to consolidate your high-rates loans and credit cards and pay off the balance at a lower interest rate or even 0 interest rate during a limited introductory period.Continue »