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.

noel Posted in Credit Card Guides


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