Credit card holders may find sometime that they suddenly have more credit card debt than they bargained for. In today’s’ market cardholders really should not be too concerned because most can opt for a balance transfer and save money. To some, this may sound like trading debt for more debt but it can actually help one save money. More and more card companies are offering balance transfer programs with low to no transfer fees.
With a 0% credit card balance transfer offer you could transfer the balance that you have on one card that is charging you 17% to a card that offers 0%. The new card pays off the debt that you have on the old card and then the balance is on your new card at the lower, better rate. This will give you time to pay off debt until this introductory feature ends without incurring any interest fees. It is important to note here that you should not close your oldest credit card account, even if it is one of the balances you are transferring, because this will go against your credit score.
Pulaski Bank & Trust offers two separate card options with excellent benefits and the very lowest interest rates. Their Visa Classic card offers a fixed APR of 6.50% after the intro 0% APR on balance transfers expires. Although this card does charge an annual fee, rate is lower than most other credit cards, so it can still bring you a big savings.
A credit card balance transfer can be great if you can find one that will have the 0% long enough for you to be able to pay off your entire balance. Many of these credit card companies that are now offering the 0% balance transfer give you 3 months, 6 months, 9 months, 12 months, or 15 months to pay off your debt before you begin paying any interest on your balance. With the Capital One Platinum Prestige credit card, there is no annual fee and an intro APR of 0% until January of 2010 on balance transfers and purchases. Be sure to read the fine print of each credit card company to ensure that you will not have any other miscellaneous fees, and if possible, 0% on all new purchases as well.
Some credit card companies may offer 0% credit card balance transfers but they may also charge you fees for the transfer. Most charge between 2 – 3% for the total balance transfer. You should always pay the minimum payment or you can find yourself paying finance charges.
Sometimes changing credit card companies before the expiration of the 0% or low APR may be the way to go if you still have a large balance left on your credit card and you have good credit. Also, you should not have to give up other great features just because you are transferring a balance. The ideal would be to find a card with all the bells whistles and 0% balance transfer rate, no fees, and a rewards program (preferable cash-back).
Things you should also weigh in when finding a card program that is right for you:
Long duration of 0 interest:
The zero interest balance transfer probably doesn’t last forever. There is generally a period of time during which no interest accumulates so that the cardholder has time to pay off the debt. A consumer with a good credit history can request that the 0% balance transfers credit card either has a lifetime zero interest or that it has a very long duration (at least one year) during which no interest accumulates.
Low purchase APR:
Make sure the balance transfer card offers a low APR on purchases. Where many people get trapped in bad deals with balance transfers credit cards is that they use the cards for purchases in addition to the transfers. Often, these credit cards have high interest rates on purchases. Not only check out the APR on the balance transfer but also review what the APR will be on purchases that are made on the balance transfers credit card. Additionally, it is smart to look at what the APR on the balance transfer will be after the promotional period runs out. The Citi Platinum Select MasterCard has a 0% APR on purchases and balance transfers will last for up to twelve months and after that time the interest rate will increase.
Cash back and rewards:
Many consumers do not realize that the zero percent interest rate on balance transfers credit cards is not a reward in and of itself. You want to get a card that is going to keep working for you. To do this, you need to select cards that also offer other rewards. Your ideal card may be The Discover® it Card which is an excellent cash back credit card which allows you to get up to 5% cash back on your every day purchases. The Discover® it Card also has a 0% intro APR on purchases and balance transfers, no annual fee and a guaranteed fraud protection.
No matter which card you choose, it is important to keep track of when the 0% APR expires and to make the most payments that you can to successfully bring down debt.