Understand the Basics of Balance Transfers:
To begin comparing balance transfer offers, it is essential to grasp the fundamentals of how they work:
A balance transfer involves moving your outstanding credit card balances to a new card with a lower interest rate or promotional offer.
The primary goal of a balance transfer is to reduce interest charges and potentially pay off your debt faster.
Balance transfer offers typically come with an introductory 0% APR (Annual Percentage Rate) period, allowing you to save on interest during that time.
Evaluate the Length of the Introductory Period:
The duration of the introductory period is a crucial factor to consider when comparing balance transfer offers. Longer periods provide more time to pay off the balance without incurring interest charges. Here's what to keep in mind:
Look for balance transfer offers with extended 0% APR periods, typically ranging from 6 to 24 months.
Consider your ability to pay off the transferred balance within the promotional period and choose an offer that aligns with your financial situation.
If you have a larger balance or anticipate needing more time to pay it off, a longer introductory period will be advantageous.
Analyze Balance Transfer Fees:
Balance transfer offers often come with a fee, usually a percentage of the amount transferred. Carefully evaluating these fees is vital to determine the overall cost-effectiveness of the offer. Here's what to consider:
Calculate the balance transfer fee and compare it to the potential interest savings you'll gain during the introductory period.
In some cases, it may be worthwhile to pay a fee if the interest savings outweigh the cost. However, if you can find a fee-free offer, it could be even more beneficial.
Balance transfer fees typically range from 3% to 5% of the transferred amount, so take this into account when comparing offers.
Consider Post-Introductory APR:
While the introductory period provides relief from interest charges, it's crucial to understand the post-introductory APR that will apply to any remaining balance after the promotion ends. Here's what to look for:
Take note of the post-introductory APR and ensure it is competitive, as a high APR can erode the benefits gained during the promotional period.
Look for balance transfer offers with a lower ongoing APR or consider paying off the balance entirely before the promotional period expires.
If you anticipate carrying a balance beyond the introductory period, a lower post-introductory APR will be beneficial in the long run.
Evaluate Eligibility and Credit Score Impact:
Not all balance transfer offers are available to everyone. It's essential to consider your eligibility and understand how applying for these offers may impact your credit score. Here are some factors to bear in mind:
Some balance transfer offers may require a good credit score to qualify. Review the eligibility criteria and check if you meet the requirements before applying.
Applying for multiple credit cards can impact your credit score, so choose your applications wisely and consider the potential effects on your creditworthiness.
Being aware of your credit score and understanding the impact of applying for a balance transfer offer is crucial in making an informed decision and avoiding any potential negative effects on your credit.
Consider Additional Benefits and Features:
Beyond the balance transfer offer itself, it's important to assess the overall value proposition of the credit card and any additional benefits it provides. Here are some features to look for:
Rewards Programs: Some balance transfer credit cards offer rewards programs that allow you to earn cash back, points, or miles on your purchases. Evaluate the reward structure and determine if it aligns with your spending habits and financial goals.
Sign-Up Bonuses: Many credit cards offer sign-up bonuses, such as a lump sum of cash back or bonus points. Take these bonuses into consideration as they can enhance the value of the credit card.
Introductory APR on Purchases: In addition to the balance transfer offer, some cards also provide an introductory 0% APR on new purchases. If you anticipate making new purchases and want to avoid interest charges, this feature can be advantageous.
Travel Benefits: If you're a frequent traveler, consider credit cards that offer travel-related perks, such as airport lounge access, travel insurance, or airline or hotel loyalty program benefits.
Here are a few credit cards known for their long introductory periods on balance transfers and low balance transfer fees:
Business Advantage Customized Cash Rewards
$200 online cash rewards bonus offer
3% cash back in the category of your choice, 2% cash back at grocery stores and wholesale clubs, and 1% cash back on all other purchases. See below for details on the quarterly maximum.
0% Intro APR for your first 18 billing cycles for purchases, and for any balance transfers made within the first 60 days of opening your account. After the intro APR offer ends, a Variable APR currently 17.99% to 27.99% will apply. A 3% fee applies to all balance transfers.
Wells Fargo Reflect® Card
0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.99% to 29.99% variable APR thereafter. Balance transfers made within 120 days from account opening qualify for the introductory rate.
Citi® Double Cash Card
Earn Cash Back TWICE. Earn cash back on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. All with no annual fee.
Balance Transfer Only Offer: 0% Intro APR for 18 months on balance transfers. After that, the variable APR will be 18.99% - 28.99%, based on your creditworthiness.
Balance Transfer Fee: Intro fee of 3% of each transfer ($5 minimum) completed within the first 4 months of account opening. After that, 5% of each transfer ($5 minimum).
Balance Transfers must be completed within 4 months of account opening.
Balance Transfers do not earn cash back. The intro rate does not apply to purchases.
If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
Citi Simplicity® Card:
Get 0% Intro APR for 12 months on purchases from the date of account opening and 0% Intro APR for 21 months on balance transfers from the date of first transfer. After that, the variable APR will be 18.99% - 29.74%, based on your creditworthiness. Plus enjoy no annual fee.
Balance Transfer Fee: Intro balance transfer fee of $5 or 3% of the amount of the transfer, whichever is greater for transfers completed within 4 months of account opening. After that, the balance transfer fee will be $5 or 5% of the amount of the transfer, whichever is greater.
If you transfer a balance with this offer, interest will be charged on new purchases and unpaid introductory balances after your 0% introductory APR on purchases has expired, unless you pay the entire balance (including any transferred balance) in full each month by the due date.
Balance transfers must be completed within 4 months of account opening.
Please note that credit card terms and offers can change over time. It's always recommended to visit the respective credit card issuers' websites or contact them directly to get the most up-to-date information on their balance transfer offers, terms, and fees.
Remember to carefully review the terms and conditions of any credit card before applying to ensure it meets your specific needs and financial situation.
Conclusion:
Comparing balance transfer offers allows you to take control of your credit card debt, save money on interest charges, and work towards becoming debt-free. By understanding the basics of balance transfers, evaluating the length of the introductory period, analyzing balance transfer fees, considering the post-introductory APR, evaluating eligibility and credit score impact, and assessing additional benefits, you can make an informed decision that suits your financial needs. Disclaimer: The following article is for informational purposes only and should not be considered as financial advice. Before making any financial decisions, please consult with a qualified professional.