Opting for balance transfer on a credit card is a significant move which can have a positive impact on your finances if you choose the card wisely. A number of people who opted for balance transfers ended up paying more because they failed to consider critical factors before choosing the card to which their balances would be transferred. If you want to ensure the card that you choose is the perfect one, then there are a few factors that you need to take into consideration before making your choice.
In an effort to lure new customers, a lot of banks are offering irresistible benefits as a part of the promotional offers. The most common introductory period offer is the 0% interest on the balance transfer. This is a big benefit when you are considering transferring the outstanding balance on the card with extremely high interest rates. But, it is important to remember that the introductory offer is going to be around only for specific time. Find out when the introductory period is going to finish and the APR that is applicable. Ask if the bank will make changes to the existing balance once the promotional period is over. This will not only help you be prepared, but will also prevent any surprises a few months down the line.
Though most of the banks do have 0% interest rates on their credit cards as a part of their promotional offer, a few banks do make up for this by charging sky high processing charges to transfer the balance from one credit card to other. Ensure you check with the bank well in advance before you fill out and sign the application form. The balance transfer fees are normally in the ranges of 3% to 5% of the total amount being transferred. If this seems favorable to you and does not impact the balance significantly, go ahead and opt for the transfer.
Banks offering irresistible balance transfer deals during the introductory period, are very unforgiving if the payment is not made on time each month. The late charges and financial service charges applicable if the payment is not made on time are pretty high. It is important to find out details about the annual fee and the APR for the purchases made using the card, before you apply for it.