Posts Tagged balance transfer cards

Spreading Debt Across Multiple Balance Transfer Cards

May 31st, 2009

mulltiplecardsAre you planning to use a balance transfer card?  Most people who do usually find just one card with good terms and use that one account to move all their existing debt into.  While doing that is very beneficial, especially looking towards the future, it does have its drawbacks.

Unless you have an exceptionally high credit limit, it’s very likely that transferring your existing debt into the new card will fill up at least half of its available balance.  In fact, most folks who I’ve seen do balance transfers end up utilizing between 70% to 90% of the balance transfer card’s limit.  The result is a high credit utilization on a single card that can potentially cause a negative effect on your credit score.

Using Multiple Cards

One technique people are using is to apply for multiple balance transfer cards and spread the debt evenly among them.  That way, instead of fostering very high utilization on one card, you’ll end up using a small percentage of available credit among many cards.   In terms of your ratings, you are depicted as having a high line of credit, while managing it very successfully.   Essentially, it allows you to enjoy the benefits of a balance transfer card, without causing a possible dent in your credit score.

Dangers Of Spreading Debt

Getting more balance transfer cards, of course, means a few caveat.  Multiple cards, for the most part, means multiple annual fees to pay for,  multiple payments to schedule every month and more accounts to keep track off.  That’s a major consideration, especially if you’re already having trouble with all the accounts you have to manage.

Choosing A Balance Transfer Card: What To Look For

February 7th, 2009

When you’re shopping for a balance transfer card, an equally important criteria to consider is how you’re planning to pay the transferred debt off. Every credit card offer is different and your projected use of each should play an important factor when making your eventual choice.

If You’re Planning To Pay Off The Debt Short Term

If you’re doing the balance transfer to defer interest charges while you wait for a large amount (like a severance pay or a work bonus) within the next couple of months, a balance transfer card with 0% APR for around six months will be a good choice. Compared to 12 and 15 month zero-APR offers, many of the 6-month credit cards usually don’t charge balance transfer fees, which can easily add anywhere from $5 to $90 to your existing balance.

Six months should be a good window, as well, if you’re expecting to be able to pay the debt soon enough.

If You’re Planning To Pay Off The Debt Long Term

If you suspect you will need a little more time to settle your credit card balance then try and get an account with 12 to 15 months of 0% APR. The longer grace period should give you more leverage to pay down the debt without incurring additional interests with the downside being that most of these cards will carry a 3% balance transfer charge.

You may also want to look into lifetime balance transfer credit cards which gives lower interest rates for amounts moved from other cards. While you’re definitely not going to get a 0% offer, they can go as low as 2.99% – a huge amount of savings over the usual APR you will be paying for.

If You’re Looking To Arbitrage

When you’re looking to make money off your balance transfer credit cards, you can check this guide we wrote on balance transfer arbitrage.

Three More Non-Business Balance Transfer Credit Cards Worth Your While

January 28th, 2009

If you’ve read through our list of the best consumer balance transfer cards and still haven’t found the right for you, these three might be what you’re looking for.

Advanta Platinum 90-Day Interest Free Business Card

Advanta has pretty much everyone beat in the balance transfer credit card category, whether for individual consumers or small businesses. This card, in particular, offers 0% balance transfers for the first 15 months and a three percent fee for the transaction capped at $90.

Even better, this card offers a one-of-a-kind permanent 90-day grace period for all purchases applicable from the first day you get your card up until the duration of your account. That means all purchases do not incur any charges until after nearly three months – a definite upgrade from the typical 21 days most credit cards offer.

If you can qualify for this card from Advanta (all consumers are welcome to apply), it’s almost certain to be your new favorite!

Citi Platinum Select Card

One of Citibank’s best credit card offers for balance transfers, this nets you 0% APR for up to 12 months and a standard 3% balance transfer fee.

Bank Of America Pet Rewards Card

This card from BOA gives you 0% APR on balance transfers for up to 6 months. While the duration is certainly shorter than what most credit cards offer, it’s one of the few remaining cards that impose no balance transfer fees. Apart from that, this card offers cash back rebates from pet-related purchases like veterinary services and pet store expenses.