How do balance transfer cards work?
Because they offer 12 months or more of 0% APR, balance transfer cards can be lifesavers in helping you pay down debt. Once you’ve selected the best-fitting balance transfer card for your needs, review your outstanding debts and the interest rates associated with each. Transfer the outstanding debt with the highest interest rate to your new balance transfer card. Use the introductory period to take advantage of no interest charges and pay off all of that transferred debt.
Are balance transfer cards a good idea?
No matter the type of credit card, responsible card use is very important. Credit cards should not be used to charge something you cannot afford. However, when life happens and emergencies make this unavoidable, a good balance transfer card can save you many dollars and many years of the burden of debt. Be sure to read the fine print and avoid unwanted surprises later.
What are the most important things to consider when shopping for a balance transfer card?
- Introductory APR and term. Many (but not all) balance transfer cards offer an introductory annual percentage rate that lasts for a certain number of billing cycles before changing to the regular annual percentage rate.
- Regular APR. Once the introductory rate is over, the regular annual percentage rate will become your new rate.
- Balance transfer fee. Many cards charge a fee that applies to the balance transferred. This fee is usually a percentage of the total balance.
- Annual fee. While many balance transfer cards waive the annual fee for the first year, some will charge an annual fee thereafter.
- Credit score needed for approval. It is important to know if your credit score is high enough to be considered for approval.
- Rewards. Many balance transfer cards offer rewards for travel, everyday spending or cashback.
What is a balance transfer fee?
Most balance transfer credit cards charge a fee on balances transferred. The fee is usually a percentage or minimum dollar amount of the total balance transferred.
How do you transfer a balance?
Once you have selected the best balance transfer credit card for your needs, you can find information on the credit card’s website on how to initiate a balance transfer. You can also call their customer support number for one-on-one assistance.