In the event you struggle to pay your credit card bills each month, a balance transfer can help you consolidate all that debt on to a card. This balance transfer card will usually have a low a balance transfer rate for a definite time frame. Perhaps three months to nine months depending on the card.
This will help you to enjoy a period of time without high rates of interest, get your finances in order, and thereby pay off your credit card debt.
How a Balance Transfer Can Help
A balance transfer credit card can be a nice option for those trying to control their credit card debt. With so plenty of balance transfer options available, however, you need to know the best ways of comparing balance transfer credit cards.
What are the balance transfer rates that are available on the card? Some cards offer 0% for three months to six months, other cards offer 2% for an extended time frame, such as nine or twelve months. Then there’s low rate cards which offer a balance transfer rate of interest for the whole life of the transfer.
Balance Transfer Rates
However, not all balance transfer cards are created equal, and there are various things you ought to keep in mind when comparing balance transfer credit cards.
What are the regular credit card rates on the card you are thinking about? When your balance transfer rate expires, this is the rate that you will must pay. Will you be able to pay off your balance in time? If not, is the reversion rate on the card you are thinking about more or less than the rate you already enjoy?
You ought to also think about how long the balance transfer rate lasts for. Realistically, when will you be able to pay off the whole balance? Try not to receive a balance transfer card that offers the transfer rate for a time frame that is less than the time it will take for you to repay the whole balance.
The annual fees on balance transfer cards can range from as low as $40 to $300 & higher. Think carefully about which card is better for you. Some people justify the high annual fees by claiming that they enjoy the reward programme of the card.
Make sure that any additional benefits that your card offers are useful for you, if not, you may be better off choosing a basic card with low annual fees and low rates.
Once you receive a new balance transfer credit card, you will need to pay the annual fees on the card. The fees vary from card to card, but can be as high as $290. Is it worthwhile to pay the high annual fees to enjoy a short period of respite from high rates? You will need to do the math to figure this out.
As you can see, there’s various details that you ought to not overlook when comparing balance transfer credit cards.
Cathy is part of the team that manages Credit Card Finder, a complimentary credit card comparison service and a personal finance blog based in Sydney, Australia. Before she joined ACC, she was a staff nurse at Clark Airbase Hospital and conducted lectures on First Aid, Bio-terrorism and Disaster Management.
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