Advertisements

If your credit card debt is getting too high or you just want to employ a strategy that can save you money, it is a good idea to find a way to get lower interest rates on your outstanding credit card balances. One way to achieve this savings is to transfer your balances to a no balance transfer fee card. The key is to find a no balance transfer fee card with as low of an interest rate as your current cards and has no annual fees.

There are some plans that may not seem as if they will save you much money, and that may be true if you were to only transfer one low balance or a few low balance cards. For example, if you transfer a low balance like $1200 to a credit card that charges 0% interest but requires a 3% balance transfer fee, you will end up paying $36 initially. If you make that same transfer to a no balance transfer fee card, but the card has an ongoing monthly low rate interest fee of 3%, you will end up paying $36 monthly. As you can clearly see, it’s best to pay the one time upfront fee and locate a card that offers a zero percent interest or a very low interest rate ongoing.

It is important to remember that if you are transferring many large credit card balances, you will likely pay a fee for each at around 3%. If the amounts are significant like $3000, each transfer could end up costing you up to $90. Carefully spend time adding up these fees so you can compare them with the eventual savings. It is important to know how long the zero or low introductory interest rate lasts, and how much the interest will rise when the introductory period ends. If a no balance transfer fee card has poor terms it can easily cost you much more money long term even though it costs you nothing to transfer existing balances. It might make more financial sense to pay balance transfer fees on a credit card with a longer zero or low interest rate period, or a card that does not increase significantly after the introductory period.

It requires some mathematical examination to determine your best move, but in almost all cases, making the transfer to a low interest rate credit card with favorable post introductory terms will save you money. A no balance transfer fee card will make the savings even more significant.

Related posts:

1. Balance Transfer Details
2. Free Balance Transfer Credit Cards
3. Tips For Paying Off Credit Card Debt
4. Best Cash Back Credit Cards
5. Picking the Perfect Credit Card