iQuanti: If you have credit card debt, you may have considered a balance transfer. A balance transfer is when you transfer existing debt to a new credit card with a low or 0% intro APR. Balance transfer credit cards are a great tool to pay down credit card debt, as they give you a period of time in which your debt will not continue to accrue interest.
While the primary factor most people will consider when choosing a balance transfer credit card is how long the intro 0% APR period is, keep in mind that ideally, a good balance transfer credit card is a card you can continue to use after the intro period is over. With that in mind, here are some of the things you should look for when comparing balance transfer credit cards.
Choosing the Right Balance Transfer Credit Card
It's important to compare balance transfer cards in order to find the lowest introductory APR with the best rewards. Finding a 0% introductory APR with a period of 12 months or more is ideal, offering a longer period of time when you can concentrate on paying down your debt without paying interest.
Calculate how much will be paid towards the debt each month and determine how much progress you'll make during the promotional period. Keep in mind that a balance transfer often involves a fee, which will be a certain percentage of the transferred debt. If the fee exceeds the amount of interest you would pay without a balance transfer, it isn't worth it.
Beyond the 0% Intro Period
Many credit cards offer a low intro APR period on balance transfers and also offer great cash back rewards. Remember that closing a card and opening a new card are both commitments from the perspective of credit bureaus, so to keep your credit score as high as possible, you'll want to pick a card that you can use for years to come. With that in mind, here are some additional factors to consider:
- Earns rewards: Some balance transfer credit cards don't earn rewards at all, while other great rewards cards offer over a year of 0% intro APR
- No annual fee: Simply put, you don't want to have to spend money to save money
- 0% intro purchase APR: Balance transfers and new purchases are treated differently by credit card issuers, and a 0% intro purchase APR will also give you more flexibility for new spending — although you don't want to build back the debt you're paying down
- Security features: A credit card with credit score monitoring, account freezing and no liability for fraud is essential to rebuilding credit
The Benefits of a Balance Transfer Credit Card
There are many upsides to transferring debt to another credit card. You can pay off debt faster and easier by consolidating monthly payments, and save money on interest while you pay down your debt.
If debt is piling up with a high interest rate, applying for a balance transfer credit card is the right move to save money. Consolidate payments and apply more money towards the balance and less towards the interest rate, allowing your debt to be paid off quicker and easier.
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Original Source: How to Compare Balance Transfer Credit Cards
