How to choose a right balance transfer credit card?
It is very important to choose a correct balance transfer credit card as the right choice can help you pay debt of high interest rate credit card. Balance transfer can be really expensive if it is not done right or is done by using expensive credit cards. So before applying for a transfer credit card it is necessary to look for the best one that suits your needs.
Many balance transfer credit cards offers very low or 0% interest rate for balance transfer as introductory offer. For quite some time, this introductory interest rate will lessen or remove monthly finance charges on your balance transfer. When finance charges are not there it becomes easier for a person to pay the credit card balance. It is good if an issuer offers 0% interest rate but if you get low interest rate it is not bad either.
As per law promotional interest rates must last for minimum six months. But there are few issuers that offer the promotional interest rates for as long as 18 to 21 months. This is really beneficial to customers as they can pay off their balance without paying interest.
Once the promotional interest rate period gets expires, you will need to pay the interest with regular balance transfer rate. You definitely do not want to pay high interest rate once the introductory period is over and especially when the period was not that long in which you could have paid off the entire balance transfer.
There are many credit cards that offer same introductory rates for your purchases as well as balance transfer. You may find it quite attractive but be cautious this can work against you. If you keep on placing charges in card due to promotional rates then you are actually working against towards paying off the balance transfer.
Generally, the balance transfer fee is 3% to 5% of the amount that you transfer or it is minimum $5. Hence more the balance you transfer, more your fee will be. So if you encounter a credit card that do not charge balance transfer fee or offers really low fee, consider that card strongly.
If you receive an offer for 0% rate kindly do not think that you will be approved for the card. In general, the issuers send pre-approval offers to many customers who meet certain preset criteria. Once you apply, the credit card issuer will investigate deeply, your credit history, income and various other criteria. This will decide whether you qualify or not. If you meet all the criteria then only you will be qualified for low interest rate balance transfer. If you have a really good credit history, you stand a good chance to qualify.
Many balance transfer credit cards needs you to transfer your money within a limited time period. For instance you may receive promotional rates only if you do that within 60 days of account opening. If you do not need to transfer money right now, either you should wait to apply or apply for the card that does not ask you to do within the limited time frame.
Generally, you cannot transfer balances between credit cards of the same company. So when you wish to balance transfer, do not consider cards of the same issuer.
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