Free Tips and Advice about 0 Intro Balance Transfer Credit Card Offers
Credit card balance transfers can end up being costly if you don't do it right or if you transfer to an expensive credit card. Here are tips to consider before applying for a balance transfer:
Is there a special introductory interest rate? A lot of credit cards offer a low or a 0% introductory interest rate on balance transfers. The introductory interest rate will reduce or eliminate monthly finance charges on your balance transfer during the intro period. Try to take advantage of the 0 interest and pay off the transferred credit card balance during the intro period.
How long is the introductory period? Introductory rates generally last from six months to a year. A longer introductory period will give you more time to pay off your balance without receiving the full finance charge.
What's the APR after the introductory rate expires? The lower the rate the better, especially if you're not going to be able to fully payoff the transferred balance. You don't want to end up with a new credit card that has a higher (after intro) rate than your previous card(s). Just knowing that your APR will increase after the intro period should motivate you to pay off your balance quickly. Make sure you understand if the balance transfer APR will be different from the purchases APR (it usually is).
Does the introductory rate apply to balances transferred or purchases or to both? A lot of credit cards apply one interest rate to transferred balances and another to purchases. Sometimes there's a third APR for cash advances. If the card applies different interest rates to different types of balances, understand which type of balance receives the intro rate and which receives the regular rate.
Do you indeed qualify for the introductory rate? Just because you received a preapproved credit card offer for a 0% intro rate doesn't mean you'll actually qualify for approval. The interest rate you ultimately receive will depend on your credit history and may end up being higher than you expected if your credit is bad, or even less than perfect. It's not likely that any credit card company will know for certain whether or not you'll get approved until after you apply and they review your credit report. But as you should know by now, special low interest rates and rewards credit cards typically require near perfect credit.
Are there balance transfer fees? Even when you have a low introductory rate on your balance transfer, you might get charged a balance transfer fee. This might be a flat fee or a percentage of the balance you transfer. The credit card might waive fees for initial balances transferred, but charge a fee for subsequent balance transfers.
What is the default rate and when does it take effect? The default rate is the highest interest rate the credit card company will charge should you violate conditions like making a late payment or by going over your credit limit. Find out the amount of this interest rate and any actions that might cause it to go into effect.
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