Understanding Balance Transfer Applications
As a rule, credit card applications are extremely difficult to understand. This is the way credit card companies want them, as the less consumers understand, these companies can make on interest and fees.
One of the most difficult thing for consumers to understand are the terms and fees associated with balance transfers. However, getting a good understanding of the ins and outs of balance transfer applications is not as difficult as it may seem.
First, the most important factor to consider is the introductory APR. Most people seeking out balance transfer credit cards [http://www.smartbalancetransfers.com] are looking for a 0% rate that lasts an entire year. Unfortunately, many credit card companies that advertise 0% interest rates for a full year don't quite deliver on their promise. How can they do that? With a little fine print.
Here's a prime example: get a 0% APR for up to 1 year. The key words here are "up to," and a close look at the fine print of a credit card offering this type of deal will reveal that only consumers with the best credit will get a 0% rate for a full year. Those with good and average credit may be approved, but only offered a 0% APR for as little as 3 months.
Fortunately, this information is clearly disclosed in the fine print. Before applying, check the terms and conditions of the application. There, you will find out if the 0% rate is only for some people. If that is the case, you can still apply. Just don't transfer balances online. Instead, wait until your credit card arrives in the mail. If your 0% rate only lasts for 3 months, apply for a different card. Here's why.
Balance transfers rack up fees, which are generally 3% of the amount transferred. If you get a 0% rate for a full year, this is not a big deal at all, as most people will save in excess of $100 for every $1000 they transfer, even with fees. However, if you only get a 0% APR for 3 or 6 months, the savings a balance transfer will bring are extremely limited. In only three months, you'll essentially break even. If the term is 6 months, you'll save about $50 for every $1,000 transferred. Ultimately, however, neither of these situations is as good as getting a 0% rate for a full year.
As consumers, the key to getting the most out of a 0% balance transfer is to capture a full year without interest. To do so, look for credit cards that offer 0% rates that last 12 months, not up to 1 year.
One of the most difficult thing for consumers to understand are the terms and fees associated with balance transfers. However, getting a good understanding of the ins and outs of balance transfer applications is not as difficult as it may seem.
First, the most important factor to consider is the introductory APR. Most people seeking out balance transfer credit cards [http://www.smartbalancetransfers.com] are looking for a 0% rate that lasts an entire year. Unfortunately, many credit card companies that advertise 0% interest rates for a full year don't quite deliver on their promise. How can they do that? With a little fine print.
Here's a prime example: get a 0% APR for up to 1 year. The key words here are "up to," and a close look at the fine print of a credit card offering this type of deal will reveal that only consumers with the best credit will get a 0% rate for a full year. Those with good and average credit may be approved, but only offered a 0% APR for as little as 3 months.
Fortunately, this information is clearly disclosed in the fine print. Before applying, check the terms and conditions of the application. There, you will find out if the 0% rate is only for some people. If that is the case, you can still apply. Just don't transfer balances online. Instead, wait until your credit card arrives in the mail. If your 0% rate only lasts for 3 months, apply for a different card. Here's why.
Balance transfers rack up fees, which are generally 3% of the amount transferred. If you get a 0% rate for a full year, this is not a big deal at all, as most people will save in excess of $100 for every $1000 they transfer, even with fees. However, if you only get a 0% APR for 3 or 6 months, the savings a balance transfer will bring are extremely limited. In only three months, you'll essentially break even. If the term is 6 months, you'll save about $50 for every $1,000 transferred. Ultimately, however, neither of these situations is as good as getting a 0% rate for a full year.
As consumers, the key to getting the most out of a 0% balance transfer is to capture a full year without interest. To do so, look for credit cards that offer 0% rates that last 12 months, not up to 1 year.
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