Your Guide to Comparing Balance Transfer Cards

By Leni Parrish on August 29, 2009

Credit cards that offer 0% interest rate for balance transfers are growing in popularity. As more people get stuck in debt, getting a new card with 0% APR seems to be the easiest way to solve the problem. Nevertheless, before you do sign up for a new card, do not forget to compare your choices. Below are guidelines that you should consider when comparing balance transfer cards.

Length of the Introductory Period
How long can you enjoy your 0% interest rate? Some cards offer only 3 months for their introductory period while there are others that allow up to 12 months of zero 0% interest.  Surely, it would be better to go with the credit card that offers the longest 0% interest rate promo. Thus, go for the longer haul.

Regular Interest Rate Value
How much is the regular APR when the introductory period ends? This is where you want to be cautious. Some cards may offer a very attractive low APR but when the promo ends, you could end up with a high-rate card on your hands.

Balance Transfer Fees
How much will you be charged each time you transfer a balance? The balance transfer fee can range from $50 to $75, plus 3% to 5% of the amount transferred. Hence, if you are going to transfer a balance worth $500, you can be charged with an additional $50 flat fee plus 5% or $25, which sums up to $575 in total.

APR for Purchases
Issuers usually make up for their 0% offer on balance transfers by imposing a higher interest rate on purchases. This is why balance transfer cards are not recommended for purchasing. If you must make a purchase to keep your account active, limit yourself to just the small ones.

Credit Requirements
Before submitting your application, make sure your personal credit rating is eligible for approval. Most of these cards require a high credit score so if you only have an average rating, your application may still get declined. Not only will applying for the wrong credit card be a waste of time, you could also be doing more damage to your credit score if you get declined. Avoid such complications by checking the card’s credit requirement.

Terms and Conditions
As a general rule, anyone who is applying for a credit card is advised to spend time reading and understanding the terms and conditions of the agreement you are about to enter. You can compare these cards more effectively by analyzing its Agreement page.

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