This is a popular question frequently posed if you ask me by visitors of my web page. It is also one of the most difficult credit card questions to be able to answer. The simplest answer is “it depends. ” If only it were that easy. Finding the best balance transfer depends on a number of factors. Here, we will examine a handful of common situations where there is really a best balance transfer option.
Situation I: You want to lessen your current interest rate and is likely to make new purchases.
In this scenario, a credit card that comes with a 0% interest rate on buys and balance transfers is clearly your best option. Offers for these credit cards are very common and most provide a 0% rate for 1 year. This balance transfer approach cuts down your current interest expenses though keeping down interest costs about new purchases.
A downside to numerous credit cards is that nearly all will impose a 3% balance transfer fee of up to $75. However, even with the balance transfer fee, transferring a $3500 balance from the card with a 14% rate will still save you around $400 on interest, not such as the money you save on new purchases. For most, this is the foremost balance transfer credit card.
Situation 2: You want to transfer a high rate balance and will definitely not make new purchases.
Here, a no fee credit card is the foremost balance transfer option. Finding a no fee balance transfer credit card is a difficult task currently, as most companies no longer offer them. However, with this sort of card, transferring a $3500 balance from a charge card that charges 14% interest could save you over $500.
A major downside to absolutely no fee balance transfer offers is that most will not offer a 0% fee on purchases. Thus, if you add $2, 000 in buys, you may end up wasting the amount of money you saved on the balance transfer by racking up another $300 in interest charges.
Fortunately, there is a easy way around this option. Simply get a charge card that offers 0%, no fee balance transfers and another which offers 0% on purchases. For nearly all, this can be the very best overall balance transfer option.
Situation 3: You intend to pay balance off over a long time period.
If you plan to pay your credit card balances down over a longer period of time, a Fixed APR credit card is just about the best balance transfer option. Fixed APR balance transfers typically give a balance transfer rate of 4. 99% to 5. 99% until the balance is repaid.
Many Predetermined APR cards charge balance transport fees, effectively raising your rate during the first year. Even so, if you intend to pay balance over a period of several years, a fixed APR balance transport will offer solid savings over time.
An analysis of your current situation can go further in finding the simplest way to save with a balance transport. For many, a no charge balance transfer, combined with a 0% credit card, will provide the most benefits. But as you can view, when it comes to selecting the best balance transfer, it really may depend.
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