0% Balance Transfer Rates: Are They Worth It?
By Danielle Buffardi

Imagine being able to transfer high interest credit card rate balances over to another card that offers 0% rates on balance transfers for up to 12 months. Sounds fantastic right? Not so fast, not all cards are created equal. Some major credit card companies place a barely noticeable asterisk next to the “12” in the description, so it would look something like this “12*”. Who knew that such a small symbol could mean gigantic things to its consumer? We do and we want our readers to as well.

Common sense tells us that we should always read the fine print when it comes to applying for and accepting new credit cards, especially those offering 0% balance transfers for any length of time. What that fine print and asterisk are telling you is that that great deal of 0% on balance transfers may only be available to those applicants that currently hold next to perfect credit. What that means for the rest of the applicants that don’t necessarily hold excellent credit ratings is that you might get a decent transfer rate for a certain number of months, which most likely will not be the full 12 months the credit card companies are advertising. The number of months varies, however it’s often somewhere in the ball park of 6-9 months.

Let’s not forget those transfer fees either. Credit card companies can, and will most likely, charge you a fee for transferring your other card balances over to their card. This fee can range anywhere from 1-5% per transfer of the total amount of each balance transfer. Is this fee worth paying you ask? In short, the answer is yes if you are able to get approved for a credit card offering you 0% transfer rates for twelve full months. Let’s look at an example. Say you wish to transfer a balance of $5000 to a credit card that’s offering you 0% for twelve months, if your original balance is on a credit card that you’re paying 15% interest on, then you would be saving yourself $500 of interest should you choose to go with the balance transfer. This $500 savings is including a 5% balance transfer fee. Anything less than a full year of 0% financing on balance transfers is not worth your time as the savings will be minimal if any at all, and you would only see savings if you were to pay off the balance before the 0% financing expires.

Bottom line is to read the fine print of all credit card terms and applications that apply to balance transfers. If your credit is so-so, then overall the balance transfer may not be a viable option for you. However, if your credit is immaculate and you wish to lower your credit card debt, then finding a credit card offering you a 0% balance transfer for a full year can absolutely aid you in eliminating your credit card debt altogether.

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