Balance Transfers On Credit Cards - What Should You Ask

By Susan Lou, July 04, 2010

A number of people opt for balance transfers on their credit cards because it offers them a chance to clear off their debts faster and at lesser rate of interest, thus helping them save hundreds of dollars. However, the key to getting it right is choosing the right cards. If you thought that this is an easy process, think again! With an increasing number of banks and financial institutions offering credit cards, choosing the right credit card for balance transfers is easier said than done. There are a few questions that you need to ask yourself before you choose the perfect option.

Question #1: What is the introductory rate of interest?

In this highly competitive world, banks are willing to bend over backwards to ensure they attract more customers. There are special rates of interest being offered for people who would like to opt for balance transfers on credit cards. Hence, check with a few banks and find out their introductory interest rates and the benefits being offered. Comparing the information you collect will help you shortlist on the card that is best suited for you.

Question #2: For how long does the introductory interest rate apply?

This is one of the most critical questions to ask. Most banks do offer irresistible introductory offers, but they last only for a couple of months. Once the offer period elapses, you will need to pay the regular APR. Hence, find out for how long the introductory rates last. Opt for credit cards that offer an introductory period of at least six months to a year if you want to save a significant amount of money. In addition to the duration, find out the APR once the offer period is up. This will keep you prepared for the change and not take you by surprise when you will have to pay more than you used to.

Question #3: What are the other fees associated with balance transfer?

One of the pet peeves of millions of consumers from various parts of the world is that the banks do not keep informed about the various charges that will be charged on their account. In order to ensure clarity, ascertain the other fees that you will have to pay in order to complete the process. Find out if there are any processing fees or admin costs associated with this procedure.

Once you have taken all factors into consideration and are confident about your choice, go ahead and opt for the balance transfer. You will end up making a decision you will not regret!

Susan Lou

Susan Lou is a business consultant with a largest multinational corporation. With a Masters degree in Financial Management and Accounting from Princeton University, she has been an active member of the financial community. She nurtures an interest in writing and regularly writes articles related to finance and business.

« Basics Of Safe Travelling With Credit Cards

How Credit History Impacts Your Credit Card »