A balance transfer fee is charged to anyone wanting to change their credit card balances to another account. It is often included in an introductory offer and can rack up quite a large fee. If you are contemplating a balance transfer you should first consider your options. You should also understand what the charges and terms of transfer are, so you are not surprised by the amount of money it can cost you. With that in mind here are some things to consider.
First you should understand that a balance transfer fee is included with all introductory 0% interest cards. Most credit cards offer these special deals but you will need to read the terms carefully to see if there are any fees before you apply. Some cards will charge an annual fee as well. It is a good idea to compare these fees before choosing which card to take. You can use a specialist credit card site to quickly compare the different cards and choose the one offering the best deal and lowest fees and charges.
Balance transfers are not new, in fact they are very common. They have been popular for several years and have recently gained popularity due to the financial crisis and economic uncertainty of the past few years. A great deal of this recent popularity has come from the low interest rates available on balance transfers. Balance transfer offers are now easy to find and many card issuers now offer them.
One of the reasons these balance transfers are so popular is the ease of applying. All you need to do to apply online is to provide information on one form. There is no need to fax any documents, most cards will just ask for the information you submit online. They will usually provide a link to a website where you can find balance transfers offers, comparing the offers from all the major card issuers side by side. This saves you time and effort and allows you to apply from the comfort of your own home.
If you wish to save even more money, you can transfer your balance transfers from other high rate credit cards to balance transfers cards with low interest rates. These introductory offers on balance transfers are normally only available for a limited period of time and usually after you have paid off an important debt. There are no fees involved, so this is another way to make money over the holiday period. Some cards even offer zero APR on balance transfers if you have been a customer for at least a year. This is an attractive incentive to attract new customers and those that may be considering switching to another card issuer in the near future.
Other balance transfer fees and charges relate to transferring your balance to a new credit card. Most cards offer some form of credit card rebates and bonuses to entice you to apply. Most wings financial credit union members will also have a rewards program in force, with some offering as much as 2% on purchases and cash advances. The rewards may include cash back, air miles, or cash equivalent to a percentage of your total purchases. There are many reasons to use a card with a rewards program, but make sure you understand all the terms and conditions before you start using them.
Balance transfers are also very useful if you want to pay off an existing high interest rate loan, such as a mortgage, car loan or other debt. A one time low interest rate payment can save you thousands of dollars over the life of the loan. Some cards will offer an introductory low rate balance transfer fee of five to ten percent, although this is variable, the longer you remain a member, the lower this introductory rate will become. If you are thinking about transferring your balances to a low-rate card, remember to take into account any annual fee, any annual percentage rate, and other charges and fees before taking out the new card.
There are many reasons to consider a balance transfer card. However, make sure that you look at all aspects of the application, including the terms and conditions, the application fee and other costs, and the long-term impact on your financial situation before you sign up for one. Remember that you do not have to take out a long-term commitment just to get a one-time low interest rate reduction in your credit card debt. Before you get started, find out all you can about transferring your high-interest credit card debt and save yourself hundreds of dollars every month.