If you have a high balance on a credit card that has high interest, it may make the most sense to transfer the balance onto a lower interest rate credit card. Over time with the right credit card you can save hundreds of dollars in interest charges. Most credit cards now have a balance transfer fee. From time to time some credit cards may offer a 0 fee balance transfer option. These offers are usually for a limited time. If you see one of these offers, it is in your best interest to take advantage of this balance transfer deal. In the past, most credit cards offered 0 fee balance transfers. For the previous five years, 0 balance transfers on credit card balances have been a rare siting.
Even though balance transfer cards with 0 fees are rare, you can still get a better deal transferring high-interest credit card balances to a lower interest credit card. Some credit cards offer 0 interest for 3 – 12 months. 0 Introductory offers depend on two things. The credit card offer and your credit score. Many of these cards offer a range of months from 3 – 12 months. After the introductory period ends, you need to know what will be your new interest rate on this credit card. It may be higher than your old credit card. If you only receive three months of zero interest and you paid a balance transfer fee, you will end up paying more in interest with the higher interest credit card. Be careful of any other hidden fees. The details will all be in the fine print.
There are other benefits you can receive with a new credit card besides a low-interest balance transfer. Many credit cards offer excellent reward programs. You will not only take advantage of a new lower interest rate, but you will now be able to earn bonus points on new purchases. ThisThese bonus points will offset a lot of the fees associated with the balance transfer. It is important to remember that you do not earn reward points on balance transfers.
It is a good idea to sparingly use the old credit card once the credit card has a zero credit balance. Make three to five charges a year, and immediately pay off the balance when the credit card statement comes in. Having a credit card on your account that is used very little will raise your credit score. It shows that you do not use all the credit you have available. There can be too much temptation to make new charges once the old credit card is paid off. If this is not possible for you to do, you are better off canceling and cutting up the credit card. You should not cancel the old credit card if possible. Canceling a credit card will lower your credit score for a short period.
CreditSoup® Balance Transfer Cards
Before you transfer balances from one account to another, make sure there is a benefit. Always remember before doing any balance transfer, carefully research the credit card. Does the introductory interest rate apply to balance transfers? Does this new credit card have an annual fee? What is the credit score needed to get approved for this low-interest deal? Do you need to fill out the request for a balance transfer at the time you are filling out the application? The card you are transferring balances to may, in the end, be more expensive than the credit card you have now.
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