Balance transfer deals
could be good or bad depending on the way they are used. There are some balance transfer deals, which will almost spell doom for your credit history. These balance transfer deals shouldn't be your option especially when you have a huge outstanding balance.
When the introductory period is not long enough
If the 0 APR is not offered for a long enough period, the balance transfer is not worth the risk. In fact, anything under a year is not really good enough if you are considering a balance transfer. Currently, quite a few credit card issuers
are offering 0% APR for as long as 18 to 21 months. The industry average, without these long introductory periods, is still hovering around 9 months. It's highly recommended to make your own calculating decision, before accepting such cards.
When there is a high annual fee
If you are looking at an annual fee of around $75, then you might reconsider your options. A balance transfer card with such high annual fees might not be really worth it, if you are not saving a lot through the 0% interest during the introductory period.
When there is a balance transfer fee
An increasing number of credit card issuers are imposing a high balance transfer fee these days. These transfer fee is not fixed and is between 3 ?C 5% of the actual balance that you transferring. If you have an outstanding balance of $5000, you are looking at a balance transfer fee of $250, which is quite substantial. This fee is added to your principal, and eat into your savings. Unless you are saving a lot through the 0 APR promotional period, it is not a good idea to pay the excess fee.
When there is an initial down payment needed
Going for a balance transfer card is all about the right calculations without leaving anything to imagination. If a balance transfer deal needs you to pay a part of the amount, then it could upset your calculations. Moreover, the gains through no interest will reduce if you will have to arrange for about 20% initial down payment.
Irrespective of what the introductory offer is, and the term of the introductory period, a balance transfer deal is still a normal credit card. Not being offered any attractive rewards or incentives beyond what you are getting, you should consider other options, as after the introductory period has ended, you will not be able to benefit in any way from the credit card at all.
When the APR is way above what you can manage
It is better to go for a low interest paying credit card than a balance transfer card. Some cards might initially offers a 0% APR for the first year, then hikes their charges making payments difficult.