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How to Evaluate Balance Transfer Credit Card Offers

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Are you in the market for a balance transfer credit card? If so, there are a number of things that you should ask yourself before selecting an offer. For example…

  • What’s the introductory rate?
  • How long does the introductory rate last?
  • Are there any balance transfer fees?
  • Does the card have an annual fee?
  • What happens to the APR after the intro rate expires?
  • Does the intro rate cover both purchases and balance transfers?

Ideally, you should be looking for a 0% balance transfer credit card whose intro rate runs for at least 12 months. On top of that, you should try to avoid paying balance transfer fees. Unfortunately, it’s getting increasingly difficult to find these two things together.

If you find a no fee 0% balance transfer offer it may only be a limited time offer and you may need to transfer the balance within a specified period of time, for example within the first thirty days of opening the account. A 3% balance transfer fee is standard in the industry, some balance transfer fees may be as high as 5%. So be sure you do the math and note that most balance transfer fees are not capped.

While we’re on the topic of fees, you may have noticed that I didn’t mention late fees. The reason for this is that virtually every credit card issuer will sock you with late fees if you don’t pay on time. While there might be minor differences in the magnitude of the fees, it’s pretty much the same everywhere you go. Look into automating your payments so you won’t have to worry about it. Even with automated payments it’s a good idea keep watch should your issuer change the due date on your account.

One fee that you should definitely try to avoid, however, is the annual fee. There are a ton of options out there that don’t charge an annual fee, so don’t throw your money away.

The issue of what happens to the APR after the intro rate expires is important. The APR may jump dramatically after the introductory period so keep this in mind, especially if you are still carrying a balance.

Finally, while it would be great to find a card that offers 0% on purchases as well as balance transfers, this shouldn’t be viewed as a deal-breaker. If your card of choice offers 0% on purchases, great. If not, just execute the balance transfer and then put the card away until you pay it off.

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