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In fact, some 0% APR balance transfer offers can wind up costing you a good deal of money in fees and interest charges.
In this article, we'll go over the fine print and figure out how to find the best balance transfer credit card.
The first thing to look for in a 0% APR balance transfer credit card is the duration.
For the most part, it is not difficult to find a card that offers 0% for a year.
However, some credit cards offer two tiers for balance transfers.
Individuals with excellent credit will get approved and given a 0% rate for a full year.
Those with average or below average credit may get approved for the same card, but only offered a 0% rate for 3 months.
This is one of those nasty credit card tricks buried in the fine print.
To avoid an issue like this, read the pricing information in the terms and conditions.
Once you've found a credit card that offers a 0% APR on balance transfers for 1 year, the next area to examine is the fee.
99% of balance transfer credit cards charge a 3% balance transfer fee with a maximum of $75.
If you transfer more than $2,500, the percentage amount drops.
For example, if you transfer a $5,000 balance, you will only pay $75, or 1.
5%.
With average credit card interest rates hovering above 15%, paying 3% or 1.
5% still works out to be a good deal.
While most credit cards that offer a 0% APR on balance transfers cap the maximum fee at $75, a few cards have upped the maximum dollar fee to as much as $250.
Very few companies charge this amount (and I can't name names) but you can avoid these cards by looking at the fees sections in the terms and conditions of the credit card offer.
We've discussed the 99% of credit cards that charge balance transfer fees.
Now, to the rare ( and getting rarer) 1% that offer no fee balance transfers.
There are a few catches with these offers.
First, many only offer a 0% rate for 6 months.
Those that do offer a 0% APR on no fee balance transfer for a full year generally do not offer a 0% APR on purchases.
If you know you will not use your credit card for new purchases, applying for one of these offers will provide the best savings.
However, if you think you will be carrying a balance from month to month during the year, you'll end up paying much more money in interest on new purchases than you would have spent on the balance transfer fee.
Hopefully, the process of choosing the best credit card that offers a 0% APR on balance transfers will be easier now that you are armed with the information the credit card companies don't want you to know.
Now, all you need to do to start saving money on interest is find your card and apply.
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