Using Balance Transfer Credit Card Offers to Your Advantage

The credit card balance transfer option is used for the purpose of transferring your debt to a credit card with a lower interest than the rate you are currently paying.

Credit cards with a 0% introductory rate can be a great way to save money on interest and eliminate your debt faster. In order to take full advantage of the offer it is important to know the terms and conditions. Here are some of the details you need to know before accepting the credit card offer.

Introductory period

The promotional rate is usually offered for 6 to 15 months. If you continue to have a balance at the end of the introductory period, find out exactly when it expires. For example, if the promotional rate is in effect through the billing period ending in October, you can not wait to make the payment until the bill is due in November. You will be charged the standard rate during this time, so make sure to pay off the balance the same day that the billing period ends.

Balance transfer fee

Many credit cards charge a 3% transaction fee. If you need to transfer large balances you may want to look for credit card offers where the balance transfer fee is typically capped at $75 or $99. No balance transfer fee credit card offers do also exist, but usually they do not include a 0% introductory rate, however if you believe the balance will be paid off within a year, perhaps a low introductory rate with no balance transfer fee is the best option.

Using the card for purchases

The introductory rate may be valid for purchases as well as balance transfers and in this case you can safely use the card for regular purchases during the balance transfer period as long as you stay within your credit line. Many credit cards only offer a promotional rate for balance transfers and by using the card simultaneously for purchases can result in being stuck with high interest rates for your purchases, because credit card payments are always applied to balances with the lowest interest rates.