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How to Choose a Balance Transfer Credit Card

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What's the introductory rate?

A lot of credit cards offer low or zero percent introductory interest rates for balance transfers. The introductory interest rate will reduce or eliminate monthly finance charges on your balance transfer for a certain period of time. The absence of a finance charge makes it easier for you to pay off the credit card balance. A 0% interest rate is ideal, but a low interest rate - like 2.99% - is good too.

How long is the introductory period?

By law, promotional interest rates must last at least six months, but some credit cards offer low interest for up to 18 months.

A longer introductory period gives you more time to pay off your balance with reduced interest.

What's the APR after the introductory rate expires?

Once the introductory period expires, you'll be paying interest at the regular balance transfer rate (which is sometimes the same as the purchases rate). You don't want to end up paying a high interest rate after the promotional period ends, especially if the promotional period isn't long enough

for you to pay off the full balance transfer.

Does the introductory rate apply to purchases?

Many credit cards offer the same introductory rate for your purchases and balance transfers, which makes the offer even more attractive.

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However, an introductory purchases rate might work against you. If you're racking up charges on the card because there's a promotional rate, you're working against any efforts toward paying off the balance transfer.

Do you qualify for the introductory rate?

Don't assume that because you receive an offer for a zero percent interest rate that you'll qualify for the rate. The interest rate you ultimately receive will depend on your credit history and may end up being higher than you expected if your credit isn't in the best shape.

What's the balance transfer fee?

Most credit cards charge a balance transfer fee that's often a percentage of the balance you transfer. The larger the balance transferred, the higher the fee. What's important is that the balance transfer fee doesn't negate the interest savings you're receiving by moving your balance.

Category: Forex

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