Balance Transfer Cards

Have you seen advertisements for balance transfer cards? You probably have because most of the credit cards on the market fall into this category. Some of the cards like business cards or bad credit credit cards may not have a balance transfer option. However most rewards cards, purchase specials, and charity cards will also have balance transfer options on their credit cards.

A balance transfer credit card is a card that will allow for a balance from one or more cards to be transferred to that card. Some of these cards will have introductory offers before resuming to a regular balance transfer interest rate. Other cards start out at a specific interest rate without a special offer.

The cards in the balance credit card category that you want are the introductory offers. The introductory offers may vary. You can have zero percent, a certain fixed rate for a certain period of time, or a life of the balance transfer. Let’s look at the zero percent first.

The zero percent offers mean that when you transfer the balance you will not pay interest on it for a certain period of time. This is usually between 6 and 15 months. After that time period you are paying interest at the industry rate. This offer is only good with that credit card and once the introductory offer is over you will not be able to take advantage of it again. There is normally a 2.5 to 3 percent transaction fee with the cards as well. So you are paying a little extra to get the better rate.

Other balance transfer cards offer a lower rate for a certain period of time. This could be a rate of 4.99 percent until July 2009 or for 12 months. The point is the terms will vary, but you have a very low interest rate on the balance transfer only. Instead of paying the 15.9 percent you have been paying you could pay 11 percent less. This is certainly a worthwhile option if you have a longer term than the zero percent offer.

The last option for the balance transfer cards is the life of the balance. Not many cards have this offer. What it means is that you transfer an amount during the first 30 or 60 days depending on the terms. This balance will then be at a special lower rate until that transfer amount has been paid off. Say the offer is for 1.9 percent with Barclay. If you transfer 4,000 pounds and it takes four years to pay off you are still only paying the annual percentage rate of 1.9 percent for the entire time. This option is the best because it will last for as long as you need it to. Other offers have an expiration date, which means you pay out interest after the said date at the regular interest rate.

By comparing the different rates you should be able to find a pretty great deal for balance transfer cards.