Do You Want to Transfer Credit Card Balances?

If you’re carrying a large balance on a credit card with a high interest rate, you may be able to save hundreds or even thousands of dollars in interest by making a balance transfer to a different card with lower interest. Special credit card offers with low introductory rates on balance transfers abound, often filling our mailboxes and email. These low rates usually range from zero to five percent for a limited period of time, and if you qualify you can reap large financial rewards.

Transferring credit card balances

Every credit card company has its own terms, conditions, and fees that apply to balance transfers. Do some research and you’ll save money. Here are a few tips:

Low introductory interest rate offers

All credit card introductory rates revert to a higher, standard annual percentage rate (APR) on a specific date. Check the terms and conditions section of the credit card offers you’re most interested in to see how long the introductory rate will be in effect. If you can pay for your purchases before the expiration date, you might save significant money in interest charged to your account.

Fees for transferring balances

In most cases, you’ll be charged a fee to transfer all or a portion of the balance from one credit card to another. These fees are usually a percentage of the total amount transferred and include both a minimum and maximum dollar amount. Be sure to watch for special offers from your credit card companies waiving balance transfer fees; a common practice among lenders.

Penalties for late payments

Be sure to read the terms and conditions about your credit card account to see if your annual percentage rage (APR) will increase dramatically if you are late on a payment. If it does, this penalty APR will be permanently applied to your account.

Paying all of your credit cards on time

Making your monthly credit card payment on time is vital, but did you know that if you are late making your payment on any credit card your APR on your other cards may increase. This little known fact can result in a lot of extra interest being paid on all of your cards, so be sure to submit all of your credit card payments with enough time to spare before the payment due date to allow the credit card companies to process them.