A good balance transfer offer can help you save money while paying off your credit card. It can be especially helpful when rising interest rates are causing interest to accrue faster. But finding a great balance transfer offer can be tricky, especially because the best-of lists you’ll see online won’t necessarily highlight the very best offers. Here’s what to look for and where to look instead, from myFICO.
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What Are Balance Transfer Credit Cards?
Any credit card with a promotional balance transfer offer is considered a balance transfer credit card. You can find these on all sorts of cards, including cash back, travel and low-rate cards, and the offers tend to have similar terms and restrictions:
- A low or 0% annual percentage rate (APR) on balances that you transfer to the card.
- The promotional APR lasts for a limited time, such as 15 to 21 months.
- You can’t transfer balances from another card that you have with the same issuer.
The balance transfer offers are often for new cardholders—an incentive to get you to apply for the credit card. But sometimes, card issuers offer similar promotions to current cardholders.
What to Review When Comparing Balance Transfer Offers
Balance transfer offers can be a helpful option when you’re trying to pay off credit card debt, but it’s important to read the terms and conditions closely. In particular, pay attention to these four points:
- The timeline for transferring balances. The promotional rate might only apply to balances that you transfer to the card within the first few weeks or months. However, it also might take a week or two to complete a balance transfer, so don’t wait until the last minute to make the request.
- The balance transfer fee. Card issuers often charge a 3% or 5% fee for each transfer, which is added to your card’s balance. Review the fee amount and whether the fee changes—sometimes, there’s a different fee during the initial transfer period.
- The length of the promotional period. Remaining balances at the end of the promotional period start to accrue interest at the card’s standard rate, so having a long promotional period is often best. However, if you can afford to pay off the balance quickly, you might prefer a shorter promotional period with a lower fee.
- Whether there’s a promotional rate for purchases. Any purchases you make with the credit card might start to immediately accrue interest if the card doesn’t also have a promotional interest rate for purchases.
The best balance transfer offers give you plenty of time to complete the transfers, have a long promotional period and a low balance transfer fee. If the card also offers rewards or other benefits, you might want a promotional rate on purchases. But be careful, using the card for purchases could make paying off the balance more difficult.
All these details are part of the “pricing and terms” page that’s linked to or listed on the credit card application.
Finding the Best Balance Transfer Offers
With hundreds of credit cards to choose from, finding the best card can be difficult. Here’s how you can narrow down the options to a few top choices.
- Use credit card review and comparison websites. These can be helpful resources, particularly when they explain details about the card and its balance transfer offer. However, many websites make money when visitors use their links to open a new credit card. Some websites also order credit card offers based on how much commission they earn or only review and mention cards that give them a kickback.
- But also look for options from smaller card issuers. Credit cards from small credit unions and community banks might not appear on review websites. However, unlike larger card issuers, many smaller financial institutions have balance transfer offers with no balance transfer fees. Many credit unions also cap the standard APR on their credit cards at 18%, which may be lower than the rate you’ll receive from other issuers.
In general, the review websites can be helpful for quickly comparing lots of credit cards. However, the best balance transfer offers don’t always come from the big card issuers or appear on these websites.
What to Do After Getting Your New Balance Transfer Card
To make the most of a balance transfer offer, try to transfer all your interest-accruing credit card balances to your new card. You might be able to make the transfer requests online when you first get approved, or you may have to wait until after your new card arrives.
If your card’s balance transfer limit isn’t high enough to accommodate all the balances, prioritize moving balances from the accounts with the highest interest rates. You could then make minimum payments on the new balance transfer card and focus on paying off the remaining interest-accruing balances first.
In either case, continue monitoring all your credit card accounts for several months. Even if you think the balance transfer completely paid off a card, there might be a small amount of residual interest. You don’t want to accidentally miss a payment and hurt your FICO® Score or get charged a late payment fee.
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