Credit card balance transfers offer you the opportunity to consolidate your balances and save money on interest charges. But since there are hundreds of options to choose from, how do you choose the best card for you? This checklist will help you make a smart decision — fast.

1. Decide Whether It’s Worth It To Pay a Balance Transfer Fee

Many credit cards offer 0% APR promotional financing for balance transfers, which can translate to tremendous savings on interest charges. But because most interest-free financing offers will impose a balance transfer fee — usually about 3% — on the amount transferred, it pays to crunch some numbers before signing up. To find out if the fee is worth paying in the long run, determine how much money you can put toward your balance each month during the promotional period and compare the interest savings to the fee’s cost. (The longer the 0% interest rate lasts, the more you can save.)

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2. Get the Best Offer

If you decide to apply for a card with a 0% APR balance transfer offer, here are some of the factors that you should consider:

How long does the promotional financing last?

One of the most important differences between credit cards with interest free promotional financing is the length of the offer. By law, these offers must last at least six months, but there are many that extend for a year or longer.1 Having a longer promotional financing period gives you more time to pay down your balance before interest starts to accrue on any unpaid portion.

Does the low or 0% interest rate extend to new purchases?

Many interest free financing offers for balance transfers also include a promotional rate for new purchases as well. This can be very valuable if you know you need to make a large purchase and need time to pay it off affordably.

What will the standard interest rate be?

Once your promotional rate expires, your remaining amount due will be subject to the card’s standard interest rates. That’s why it’s still important to shop around for the lowest option — especially if you anticipate carrying a balance in the future.

Sources

1. http://www.creditcards.com/credit-card-news/no-payment-no-interest-plan-deferred-credit-card-act-1282.php

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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