5 important parameters of a balance transfer offer


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 important parameters of a balance transfer offer

5 important parameters of a balance transfer offer

The content is accurate at the time of publication and is subject to change.
Whenever credit card customers go for a balance transfer offer, there are certain caveats involved which they should be aware of. There are certain parameters involved in balance transfer offers, which are more important than the others. Customers have to look at these aspects of the offer to determine the profitability of the balance transfer offer before going to check the fine print. These 5 parameters are quite essential to ensure that taking the balance transfer offer doesn`t backfire. Balance transfer fee The percentage of the balance transfer fees is an important aspect. Irrespective of what other features are offered, if the balance transfer fee is too high then the offer is not worth accepting. A lot of credit card issuers offer balance transfers with a fee higher than 4 - 5%. If the outstanding balance is 1000 dollars this would be around 50 dollars. In most cases, this starts eating into the interest savings by a 0% offer and turns it into a less attractive deal. Initial APR This is one of the more important parameters of a balance transfer offer. The initial APR determines how good the offer really is because that is what is going to attract a customer to take up the offer. In a lot of cases, customers are offered 0% APR during the promotional offer. This means that there is no interest on the outstanding balance during the initial period. This reduces the pressure that customers often feel with the high interests accumulating on top of the credit card debt. Introductory period Not only is the lower interest or 0% interest important, it is also critical to have the period long enough to last for some time. This helps to reduce interests and save some money. If the introductory period is longer than a year, it definitely becomes an attractive proposition. For a 1000 dollar outstanding balance, if your older credit card charged you at 15% APR, then you will still save 150 dollars if the introductory period lasted a year. This is a sizeable saving which makes the balance transfer offer worth taking up. If it is less than 6 months, the offer is not really worth the effort. Annual fee Not only is the balance transfer fee a troublesome one to avoid, there is another kind of fee that credit card customers should be careful about. Annual fee is generally waived off in the first year, but that cannot be taken for granted. If there is an annual fee on the cards, and it is in excess of 50 dollars, then, combined with the balance transfer fee it might negate the benefit of 0% offer. That is where the card holder should rethink on the idea of taking the balance transfer offer. APR after the introductory period This is finally something that needs to be looked at. The initial offer might be brilliant, but if the APR after the introductory period is high, the credit card is not worth using as it brings the danger of high interests once again.

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:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

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

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... 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!