credit card balance transfer

If you have one (or more) credit card, or do any sort of banking, then you probably have received some balance transfer offers. I regularly get them offering me to transfer my balance off another card for a discounted cost (because normally to do this they will charge you at least 5% right off the bat just like withdrawing cash). While these offers can help some people lower their credit card debt they aren’t for everyone, and not every offer is as good as it might first seem.

The first thing you want to look for is the interest rate on the new card. If it’s not lower than the card you are currently holding then there is no reason to move your balance to the new card. A good interest rate for cards is around 15% a year (which is still nuts, and if you are carrying much of a balance get a line of credit!)

Secondly I suggest checking out 0% balance transfer for life credit cards. If they are going to charge you 5% right off the top that is as much as carrying a balance for 4 months on your other credit card. This will very quickly eat up any savings the new card was offering.

Finally some credit cards offer you a grace period on the money that you transfer over before you’re charged the normal interest rate. If you can put off paying interest on your balance for a couple of months then you have effectively saved yourself a 2.5% a year. Anyway it all comes down to doing the work to get credit card interest rates.