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Comparing Balance Transfer Credit Card Offers

April 30, 2020 | Modified: February 13, 2024
By: Rebecca Worthington
Low or zero percent interest balance transfer credit cards can be very appealing. But, are they good for your wallet? Some may be, while others may not. It all comes down to a few key factors. Read on to learn more about what to consider when choosing a balance transfer credit card deal.

Looking for low-interest balance transfer credit cards to battle high-interest debt

According to creditcards.com Weekly Credit Card Rate Report, the national APR this month remained at an all-time high of 16.05%. That could mean an eventual hefty hike in the interest rate for those taking advantage of a super-low promo rate. When considering a credit card, be sure to look at the regular rates. They can be checked easily online. The best rates are always reserved for those with the best credit history.

American’s have an average of $6,506 in credit card debt according to the Experian State of the Credit Report released in May 2019. Those aged 51 to 71 have the highest credit card balances, averaging $8,897. People transferring high balances to take advantage of low-interest credit card promos often underestimate just how expensive it is going to be to transfer balances. Be sure to read the fine print and know what you’re going to be paying in balance transfer fees. With this in mind, here are 5 questions to answer before deciding on a balance transfer credit card.

Five questions to answer before taking advantage of a balance transfer credit card offer

  1. How long does the special credit card introductory rate period last? Is this a long enough period to pay down all or a significant portion of the balance? Remember, when that intro rate ends, the regular APR kicks in.
  2. What does the APR convert to when that special, low-interest period ends? You should know this in case you don’t pay down the balance you transferred before the special period ends. It’s also important to know going forward as you use the card. You may find there’s a very high-interest rate hiding behind that balance transfer promo. What interest rate will your unpaid balance convert to?
  3. Is it a fixed rate or an adjustable rate? With a fixed-rate, you will know what to expect. An adjustable-rate can possibly mean an unpleasant surprise in the form of a rate hike.
  4. Is there a balance transfer fee associated with the new card? The average fee when transferring credit card balances is 3% – 5%. This can get expensive. Make sure to read the fine print to identify what you’re paying to transfer a balance.
  5. Finally, does the credit card have an annual fee? Some credit card balance transfer offers may look great on the outside, but the picture may change when fees are considered.

In conclusion, before deciding on a balance transfer credit card, make sure you know how long the special low introductory rate period lasts, what the after promo credit card APR converts to, if that APR is fixed or variable, and what fees are included. Although a very low-interest rate can be tempting, it’s important to have all the facts. Make sure you carefully read the terms and conditions listed on the credit card agreement.

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