Get a low rate, but beware of the additional costs that you may incur when you transfer your balance.
Whether you carry a Discover, Visa, American Express or MasterCard, high credit card balances coupled with high interest rates can put a hefty strain on your wallet. If this sounds like you, transferring your balance might be the short-term answer you are looking for. However, this is by no means an easy solution. Credit card balance transfers require a great deal of research, fine attention to detail, and most importantly, diligence in paying off your balance.
The actual process of balance transfers is relatively effortless. Simply contact your new card issuer and fill out the necessary paperwork. However, make sure you understand the additional costs of such a process. Many balance transfer offers dip under 3.0% APR, a seemingly great deal. Unfortunately, these rates rarely last longer than a short introductory period, and can increase as much as 400%.1 Transferring your credit card balance can also incur standard fees of up to 4% of the amount transferred. Additionally, balance transfers are commonly treated as cash advances, which often accrue daily interest. 2
Once you get a full grasp of the total costs of transferring your balance, it is time to fill out credit card applications. If you expect to continue carrying a balance, a low interest credit card can be very useful. It is reasonable to continuously switch cards to chase the lowest APR on the market, but make sure you stay alert to the time constraints of the introductory rates. After you make the switch, do not simply ignore your old credit card service. To avoid further debt, it is a good idea to make the minimum payment on your old card while the transfer process takes place, which can last up to four weeks. 3 Finally, cancel your old card.
For further information, contact the Consumer Credit Counseling Service at 1-800-388-2227.
1 http://www.bankrate.com/brm/news/cc/20020814g.asp
2 http://www.creditcardguide.org/card-basics/balance-transfer.htm
3 http://www.creditcardguide.org/card-basics/credit-card-selection.htm
*See the online credit card application for details about terms and conditions of offer. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the "Apply Here" button you can review the credit card terms and conditions on 's web site.