Most consumers with established credit receive plenty of credit card offers in the mail. In fact, now, many of the major companies offer balance transfer cards. With this card, one can move a large balance with a high APR to a new card with a lower APR. Here are a few things to know about these credit cards.
Length: Most balance transfers APR’s are only short term. In fact, many companies entice customers with a great short-term rate that only lasts for six months. While this may suffice for a person with a low balance, it may not work for others who want to carry a large balance for a long time.
Amount: Now, ideally, when signing up for a balance transfer, you would receive a card offering zero percent. This will help a consumer pay off their debts without worry as interest will not accrue during the promotional period. However, if the rate is low enough, a consumer should have no problem signing up for the card provided it is lower than their current card.
Fees: In the past, companies used to offer free balance transfers. Now, this is mainly gone as banks cannot afford to offer these plans without asking for something in return. For this reason, most banks ask for a three to five percent payment from the customer to do the balance transfer. For many, this is not a big deal, but one must run the numbers for their situation. Remember, fees can add up, and a credit card owner must remain vigilant as it can turn their plan into on that is not financially viable.
When looking to save money and pay off balances, one should consider signing up for a balance transfer credit card. However, when doing so, one must read the fine print and understand all the risks.