Balance Transfer Card saves hundreds of dollars with Zero APR Introductory Offer
Balance Transfers Cards are perhaps the most powerful tool used by a credit card company to get you signed up to their credit card
Over the past few years, low interest rates combined with stiff competition between credit card companies to win your credit card loyalty, the balance transfer mechanism has been deployed by many credit companies. Most offer balance transfer rates from as low as 0% and for periods of up to 9 months.
What is a credit card balance transfer?
Simply put, you transfer your outstanding credit card balance amount from one credit card to a different credit card. The idea is to move your balance to a *new* card that is looking for your business by offering a low introductory APR interest rate to attract your business. By hopping from card to card to essentially are reducing the interest amount on your outstanding balance to the lowest possible rate. Quite often this is 0 percent! This technique will literally save you hundreds of dollars each year in interest charges.
As you swap you move from a higher interest rate to a lower one. If you have a credit card with an outstanding balance and you are not on the introductory rate then you need to transfer that balance to another card with a low balance transfer rate now! It could literally save you hundreds of pounds a year in interest charges.
Two types of balance transfer offers.
One type gives you the low interest rate for a fixed period of time, between 5 and 9 months. Then they move you to their posted standard interest rate for the card. This method is usually the best value since they oftern offer 0% balance transfers for that intro period. Please note that after the intro time period the interest rate will be move to a higher, standard rate. This is usually around 15% APR or even higher. The way to save interest is to continue to switch your balance between different credit cards to take advantage of their promo balance transfer rates. This method allows you to not pay any interest until you pay off the outstanding amount..
The challenge though is that this means spending a lot of time to make sure you change the card every 6 months, or else you get stung with paying the higher rate of interest which is the prime objective of credit card company
The second type, if you want to spend less time and commitment, is to apply for a long term balance transfer rate. These do not have a 6 month time constraint, but apply the interest rate until the outstanding balance is paid off of the card. You will find interest rates for these balances between 3 and 5% APR. This method will alsol save you money if you are less comfortable with switching cards every 6 months. The caution with this approach, however, is that any payments you place on that card will be first taken off the balance transfer funds. So you should be aware that any new spending on the card will be charged at the full interest rate which will be higher.