3.9 On Balance Transfers Card

How do Balance Transfers work? - Credit Card Balance Transfer

Credit card companies are using promotions balance transfers to attract new customers. Essentially, a balance transfer is where you reward a credit card with another credit card. Suppose you have $ 500 on your Visa Gold card with an interest rate of 16.9%. Then you receive an offer from First Bank Visa to transfer your balance and pay interest on the 3.9% for the first 12 months. It's a good deal, because of lower interest rates. The only problem is that often these rates are "teaser rates." A teaser rate is an interest rate that is temporary. In the example above, after 12 months, the low 3.interest rate of 9% could increase significantly at the end of the offer low initial rate. So you could go to pay 3.9% a day to more than 20% next.

Therefore, before enjoying some great interest rates through a balance transfer, it is important to understand how long this low rate is good for. In addition, there are often fees associated with transferring a balance, it is generally 1.5% to 3.0% of the amount transferred. This does not mean that the transfer is not a bargain, but you must be aware of all costs.

Balance transfers are very easy to implement.Some credit card companies send you checks that look like your bank checks. Just use those checks credit card company to pay your balance on a card and funds are charged to the credit card again, transferring your balance. Other companies offer balance transfers online by simply filling in your credit card on their website. Finally, you can transfer balances to the phone as well.

Transferring your credit card balance as a high interest card credit card low interest rate can save you lots of money. For example, say you have $ 3000 on a 15% card.These means you pay interest of $ 450 per year. If you have transferred the entire balance to a low interest card with a rate of 2.9% you'd pay $ 87 per year in interest savings of $ 363 per year. Balance transfers can be an excellent way to manage your interest expense, but just be sure you understand whether there are additional costs and exactly how long the low interest rate is good for.