0 Balance Transfer Credit Cards Guide

In today’s credit market, consumers are inundated with seemingly endless 0 balance transfer credit card offers from credit card companies.

On television, radio and online, as well as in the mail and traditional print media, advertising targeted to households carrying high-interest credit card debt sings the praises of the credit card balance transfer, of the ease of consolidating debt and the savings it will produce.

Before deciding to go forward with balance transfer credit cards, there are some things cardholders should know in order to make an informed decision.

What Types Of 0 Balance Transfers Credit Cards Are Available?

There are two different credit card transfer types, limited duration and fixed-rate balance transfers.

Fixed-rate balance transfers offer a rate of repayment that will never change over the life of the debt, as long as the cardholder does not go into default. Limited duration balance transfers feature 0 interest credit card to induce the cardholder to make the transfer, then switch to a regular rate after the introductory period ends.

In today’s market, limited duration balance transfers dominate, because they are easy to obtain and they immediately save the cardholder money, buying them time to pay down the debt.

What Is The Duration Of The Balance Transfer Period?

Regardless of transfer type, 0 APR balance transfer does not remain interest-free for life. Many low interest credit card offers come with a promotional rate of somewhere between 0 and 2.9%, but these rates expire, sometimes at 6 or 12 months, and then the accounts go to the regular annual rate, which in today’s market is an adjustable rate based on the prime rate.

This does not mean that interest free credit cards are not a good deal; it only means cardholders should do their homework and investigate their options prior to transferring their balances.

How Do I Initiate A Balance Transfer?

A credit card balance transfer is simply the act by a credit card company on behalf of a cardholder of transferring the debt held by that cardholder from one credit card to another, usually for the sake of long-term interest savings. Initiating a balance transfer is simple.

Cardholders usually just have to call a card company and speak to a company representative, verifying information to ascertain their identity, and authorize the transfer. The rest of the work is done by the credit card company.

Credit Card Debt Consolidation

Consolidating credit card debt is the act of combining all credit card balances into one account.

Debt consolidation is a good idea if the debt holder is able to save money in interest, adding to their ability to repay the debt, but cardholders are cautioned against keeping too many open lines of credit during the repayment process. Doing so could negatively impact credit scores and a their ability to obtain loans for homes and vehicles.

Taking advantage of 0 interest credit cards is a smart financial move for cardholders if they first consider all the factors involved and make an informed decision.

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