Balance Transfer Credit Cards

One feature that some credit cards use as their selling point is allowing a new consumer to transfer a balance from a different card and take advantage of a lower annual percentage rate. The lower rate is provided for an established grace period, which may vary between three months to a year. After the grace period has ended, the remaining balance will then be subject to the annual percentage rate established for the card. In addition to offering the lower percentage rate on the balance that was transferred to the new card, these cards may also have the added benefit of allowing purchases made during the grace period to be charged at the low balance transfer rate.

For those looking to pay down or consolidate outstanding debt, credit cards with a low rate balance transfer option may be an appropriate tool to assist in this endeavor. Consumers however must be aware that there may be other terms with the card that may negate overall cost savings. Many cards will apply a transaction fee per balance transfer, often a percentage of the balance (3% or 5% for example). Though this fee is often capped at a certain amount, consumers should be savvy and evaluate if this fee would exceed any expected cost savings.

When these credit cards carry different balance buckets, payments applied will go towards balances being carried at the lower rates before paying down those at the higher rate. This ensures that the credit card merchant will continue to accrue interest on the higher rate balances carried by consumers. .. expand

* Efforts are made to maintain accurate information, however this is not guaranteed. You should review full credit card terms and conditions on the application websites, first.