Balance Transfer Credit Cards

Written by Jessica Duquette
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Balance transfer credit cards allow you to take advantage of low or zero percent rates on a new credit account. Transferring a balance to a card with a lower interest rate can greatly reduce the amount paid for finance charges. There are many advantages to transferring a balance, the greatest being saving you money.

Cost Saving Example

Transferring balances of $10,000 with a standard interest rate of 18% annually to a low interest card can save thousands of dollars. Making monthly payments of $500 for these cards will take over 11 years and cost you over $4,000 in interest charges before the account is paid off. If you can take advantage of 5.9 percent rates with balance transfer credit cards you will pay off the card in less than 9 years and save $3,000 in interest.

Keeping your credit cards with the same company can take so long to pay off that in many cases you may have forgotten about the purchase that you are paying for. Transferring a balance will not only reduce finance charges but it may also decrease the minimum payment due each month. It is suggested you pay more than the minimum amount as doing so will pay off the balance even faster.

Finding Balance Transfer Credit Cards

Some financial institutions tend to stay away from cards that permit balance transfers because those customers may pose higher credit risks. However, there are hundreds of card companies that will open accounts for your balances, many of which offer extremely low rates. In order to find the best rate for your balance transfer you can search for credit card offers online or follow a recommendation for a reputable card company.

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