What Are Balance Transfer Credit Cards?
If you have been online comparing credit cards recently, I’m sure that you have come across a few different specialty credit card offers. However, one type of credit card that seems to be catching the eyes of many consumers is balance transfer credit cards. Balance transfer credit cards are the result of overwhelming competition in the credit card industry. Looking for something new to offer consumers that will cause a wide eyed reaction, many lenders took to offering balance transfer credit cards!
Balance transfer credit cards are specialty credit cards that allow consumers to use the available credit on them to pay off high interest debts. Although the ability to pay off high interest debt with a lower interest credit card seems appealing, most lenders didn’t stop there. As a matter of fact, these days, on most balance transfer credit cards consumers will find promotional interest rates as low as 0%! Generally, promotional interest rates last anywhere from 6 to 12 months. However, you will find some offers that offer longer introductory periods.
Benefits Of Balance Transfer Credit Card Offers
Balance transfer credit cards have a few benefits. However, the one that most consumers seem to be talking about today is the ability they give consumers to make a dent in their debts. The promotional 0% interest rate offered on many balance transfer credit card offers for 12 months gives consumers a full year to pay down their debts without paying interest. The fact that 100% of the payment sent in this period will be allocated to the principal balance helps many consumers to get out of debt each and every single year!
Another benefit that consumers generally find associated with balance transfer credit cards are the rewards programs that are offered. Rewards programs allow consumers to earn points for each dollar spent using their credit cards. These points may be earned, saved and later redeemed for a great perk. As far as rewards go, due to the overwhelming competition in the credit card industry, there are a lot of options to choose from. My personal recommendation is to not apply for a credit card that has a rewards program that you will not use. This is because the costs of credit cards is calculated including the rewards programs. Therefore, to get the most bang for your buck, it’s important that you use the rewards program offered!
Pitfalls Of Balance Transfer Credit Card Offers
To be quite honest here, I did a bit of searching for something wrong with balance transfer credit cards. However, it was almost impossible to find something. Looking through my email inbox, I found that the only thing I really get complaints about are balance transfer fees. These are the fees associated with transferring a balance from one credit card to another. Balance transfer fees generally range from 3% to 6% of the overall amount being transferred. Although, no one is happy paying these fees, generally they will be far outweighed by the savings that the balance transfer credit card will provide!
Comment from Fleta
Time January 6, 2012 at 6:41 pm
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