Balance transfer credit cards provide a promotional interest rate to customers for transferring their credit card balance over from another bank . It’s a very attractive incentive that credit providers use a marketing tool to get new customers.
Balance transfer interest rates start from 0% and can sometimes continue with this rate for 26 months or more. A balance transfer fee is typically charged when requesting a balance transfer and the fee ranges between 0% to 3%.
Are you someone who is struggling to pay off a credit card balance? If yes, than taking up of a balance transfer offer can play into your favour and help you speed up the process of paying off your debt. Do you find yourself paying credit card interest charges each month? If so, just giving yourself a break on paying interest charges for a few or several months can help out financially alot. Try to find that great balance transfer offer with a low annual fee.
Balance transfer credit cards can be a big money saver and sometimes even a lifesaver by relieving the customer of paying interest each month. The ultimate goal when taking on a balance transfer is to pay off all the credit card debt before the offer expiry date. Being disciplined and focused is the key to paying off the full balance before the promotional period ends. A not so good idea is taking out a balance transfer offer and with the interest money saved is used on spending and not on paying down the debt. This can actually put a person deeper into credit card debt.
First start with finding a low balance transfer rate and check the number of months the promotion is offerd for. Second, check the balance transfer fee which will be the fee paid for transferring a balance between credit cards. The fee typically ranges between 0% and 3% of the amount transferred.
Third, is check the annual fee and of course try to select the lowest annual fee possible as the annual fee does add up to the cost of the balance transfer. Fourth, is check the reverted interest rate which will be rate that any remaining balance will be subject too after the promotion ends. The reverted interest rate most of the time will equal to the cash advance rate which is usually approximately 20%.
Finally, if you're someone who tends to miss or forget to make the monthly repayments, then do a double check for the offer’s late payment clause. Some offers will cancel the promotional rate if one repayment is missed.
In general the best balance transfer offer are the 0% offers with a long promotional term and a low annual fee. But the best balance transfer offer for you is a different story. One person might be happy with a 0% for 6 months offer, because that’s all the time they may need to pay down the whole balance. While another person may need more time to pay off their balance and would be more suited for a 0% for 12 months offer. So do assess which offer is for your personal situation.
Another point to make, is to think about whether your balance transfer credit card will be used the only short term or for the long term. If you want a credit card to keep after the promotion period ends, then do take into account the benefits of the credit card when making comparisons.
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