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.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Low Interest Credit Cards:  Not Always The Best Choice

Obviously, consumers want the lowest interest rates possible since they do not want to spend more than necessary. With lower interest rates, consumers can pay their debt off on a more gradual schedule. O credit cards may represent the best choice for consumers who are making expensive purchases that require a long repayment period.

However, a low credit card interest rate may not make for the best rewards credit card.  These no interest credit cards may not offer many other benefits or incentives especially if the cardholder does not have perfect credit. Cards with both a low APR and attractive incentives are usually only available to those with the best credit scores.

Selecting A 0 Balance Transfer Credit Card

In addition to low interest rate cards, there are also those that charge no interest at all.

Zero percent credit cards usually offer consumers the no interest plan for an introductory period that will typically last about six months. After the introductory period, consumers will pay an ongoing annual percentage rate (APR) on purchases, balance transfers and cash advances.

Not only do these zero percent interest credit cards provide no interest for the introductory period, but many also offer additional awards and incentives. Some cards, for example, will offer cash back bonuses on certain types of purchases. Others provide rebates after the cardholder has made a certain level of purchases over a period time, usually over the course of a year. Additional types of benefits can include automobile rental insurance, purchase discounts, gift cards, fraud protection, and travel insurance.

Read The Terms And Conditions

Many consumers will find it attractive to transfer their balances from high interest credit cards to a zero interest credit card. This will save them at least six months of interest payments on the old cards. Indeed, consumers can consolidate all their credit card debt into one single monthly payment by utilizing no interest balance transfer cards.

Before making such a decision though, consumers should first consider whether a no interest option really represents the best credit card choice in the long run.

Will they really save money by making the switch? They should take note of the interest rate after the introductory period. Often this may be quite high.

Will the savings on interest over the introductory period result in net savings over the whole repayment of one’s credit balance? If the consumer can repay the entire debt over the course of the introductory period, then the answer would obviously be yes.

However, in some cases the whole repayment schedule must be worked out to see whether consolidating and transferring to a no interest card is a good decision.

Apply For Credit Card Online

Finding the lowest credit card rates is relatively easy when searching over the internet.

Not only are there the many credit card company sites that allow you to apply for credit card online, but there is wide selection of comparison sites that allow you to compare cards side by side based on selected criteria.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Interest Free Credit Cards:  A Smart Way To Consolidate Credit Card Debt.

One of the most popular moves that consumers use for credit card debt relief to take advantage of interest free credit cards and their balance transfer options.  0% balance transfer credit cards can save you $150 to $200 for every $1,000 owed (assuming your high interest credit card rate is around 15-20% APR.).  If you carry a large balance on one or more credit cards, a smart balance transfer can create significant savings.

How To Evaluate Interest Free Credit Cards

When evaluating multiple 0% interest credit card offers, you should apply for credit cards with the longest interest free period and the lowest overall balance transfer fees.

Understand that, in these tough economic times, you will have to have an excellent credit score to get the best 0 interest credit card deal.  On the other hand, interest free credit card offers are still available to people with average credit ratings with higher balance transfer fees and shorter interest free terms.  So, don’t give up trying to consolidate credit card debt.

Do Not Overlook The Impact Of Balance Transfer Fees

Until recently, the standard balance transfer fee on an interest free credit card offer was 3%.  That made a 0% APR credit card offer (with an interest free period of 12 months) have an effective balance transfer APR of 3%.  However, if the 0% APR credit card offer only lasts 6months, the effective balance transfer interest rate doubles to 6%.  Recently, several credit card companies have increased the balance transfer fee to 4%.

So, keep that in mind when you evaluate multiple 0 interest credit card offers.

Also, even though there are still a few credit card issuers that cap their balance transfer fees at $50 to $75, many credit card companies are removing those caps.

How About An 0% APR Interest Rate On Purchases?

Many interest free credit card offers also have a 0% APR on purchases.  This is a significant benefit so long as the interest free term is the same as for the 0 APR balance transfer offer.  If the 0 interest APR expires before the 0% balance transfer offer period, do not use the card for purchases.

Remember, credit card issuers apply payments to pay down the balances with the lowest interest. If the interest free period expires prematurely, the purchases would accumulate at the standard purchase APR rate (which could be as high as 19.99% APR).  So, you would not even begin to pay down this balance until all of your 0% APR balance transfer was paid in full.

Does The Interest Free Credit Card Offer Extend To Cash Advances?

If your interest free credit card offer extends to balance transfers as well as direct deposits into your checking account, you have the option of using the 0 interest credit card for other things, including, but not limited to, paying down other unsecured personal loans.

When In Doubt, Be Able To Bail Out

Have an exit strategy in place before you take advantage of an interest free credit card offer in case you are unable to eliminate the balance before the end of the 0 APR period.  Otherwise, you could get stuck paying high interest rates on any outstanding credit debt balances.  This will quickly undermine the interest saved during the interest free credit card period.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.