5 attributes of a balance transfer card which decide its worth


Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » 5 attributes of a balance transfer card which decide its worth

5 attributes of a balance transfer card which decide its worth

The content is accurate at the time of publication and is subject to change.
Balance transfer deals are amongst the most popular credit card deals amongst card holders these days. As more and more people coming out of the economic downturn are trying to pay off their debts, balance transfers offer a wonderful deal to customers to pay off the principal quickly without allowing the interests to accumulate. However, not all balance transfer deals are as good as they seem to be. Therefore here are 5 attributes, which decide how good the balance transfer card is. The introductory interest rate Every balance transfer card offers an introductory or promotional interest rate that is lower than the actual APR average rates. This introductory rate proves particularly attractive to those credit card customers who have an outstanding balance and are anxious about accumulating interests. Therefore only those credit cards which offer a 0% APR as the introductory deal, are really worth the bait. Unless this is the case, shifting from one card to another and risking paying a balance transfer fee is not worth it. Introductory offer period The time for which the introductory or promotional rate of mostly 0% is applicable is important too. This could sometimes depend on the credit rating of the individual, which is why the credit card customer must double check to confirm the period applicable in his or her case. This period could vary from 6 months to 21 months in some cases, for customers with excellent credit rating. Balance transfer fee Balance transfer fee usually varies between 3-5% of the balance transfer amount. In some cases, it is even waived off for the credit card customer. If the balance transfer fee is high, the whole deal is really not as attractive as it may seem. This is because the fee will eat into the savings that the credit card customer would be hoping to make through the promotional low interest rate offer. Therefore credit card balance transfer deals should have lesser fees to be of much value. Actual APR Although the promotional interest rate is quite low, you cannot keeping transferring balances and have to stick with the card for at least a few years. This means, the actual interest on the dues for the credit card, are important too. If the APR is too high, over 20-25%, then the deal is risky. This is because, if you don't manage to pay off your outstanding balance then you may ending up paying a lot of interest on the outstanding balance, which is not what you would have planned for. Hence the actual APR on the balance transfer card should be reasonable and not too high compared to your existing card. Annual fee and initial down payment Some balance transfer cards require you to pay off part of the outstanding amount before the balance transfer. If this percentage is high, then transferring the balance doesn't make much sense. Similarly it is a good idea to avoid balance transfer cards which have a high annual fee which is not being waived off.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!