Transferring your credit card balance from a card with a 10 percent or higher interest rate to a 0 percent interest card can save you thousands in interest payments and help get your finances on track. But there are other factors to consider besides the introductory rate, such as the cost to transfer balances and the rate once the intro rate ends. People with the best credit get the best deals.
Length of Intro Rate
Some of the most enticing balance transfer offers are the ones in which the zero percent interest rate lasts a long time. According to Credit Card Guide, as of April 2011, the Discover More card has an introductory interest rate of 0 percent for 24 months. Citi Diamond Preferred and Citi Platinum Select both have 21 month intro rate periods. Many others have intro periods of 15 months as of the time of publication.
Post Intro Interest Rate
Another factor to choosing a credit card is picking which has the best interest rate after the introductory rate is over. This number isn't the same for all cardholders. Those with better credit get lower rates after the intro period. Credit Card Guide's top balance transfer deal as of publication was Capital One Platinum Prestige Card, which reverts to a rate of 10.9 to 18.9 annual percentage rate after the introductory period. Chase Freedom has a rate of 9 percent to 23 percent. Many others have a rate of 12 percent to 21 percent after the intro rate.
Cost to Transfer Balance
When transferring balances to another card, keep in mind that the card receiving the transfer will charge a fee for each balance transfer. Generally this is fairly small. Capital One Platinum Prestige, for example, charges 3 percent per transfer. Discover More charges 5 percent per transfer. This means if you transfer three balances of 2,000, 2,500 and 1,750, you will pay a balance transfer fee of $187.50 for Capital One or $312.50 for Discover.
Other Considerations
There are other things to look at such as whether there are rewards for purchases such as travel miles or cash back. Other factors might include how much annual fees are, how high penalty interest rates are in case you miss a payment, and whether there are any other fees. Look at all the fine print before you apply for a card.
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