How Do You Compare Different Balance Transfer Credit Cards?
Posted by DoItLikeThat in CreditOne of the most popular types of credit cards over the past few years is the balance transfer credit card. As consumers in the UK have acquired credit cards in record numbers, the credit card issuing companies have found themselves in the position of having to entice customers to switch cards in order to keep increasing their business. The original idea was a good one, based on card loyalty and inertia. The reasoning was this: get people to switch credit cards by offering them a low interest rate to transfer their current balances from other credit cards. Once they’d made the switch, they’d stay with the new credit card company after the introductory rate was ended, gaining a long term customer for the company.
The only problem with the scenario was that all the credit card companies jumped on the balance transfer bandwagon, and before long 0% balance transfer offers were competing with each other for the same customers. Some consumers saw an opportunity to ‘park’ their money without paying interest on it, jumping from one 0% balance transfer card to another when the introductory rate ended. This might have spelled the end of the 0% balance transfer card - but the credit card companies knew when they had a good thing. Instead, the balance transfer offers have mutated, changing to offer low or no APR on balance transfer amounts, but slipping in protective clauses to prevent the card jumpers from parking amounts just long enough to wait for the next good balance transfer offer.
If you’re considering transferring the outstanding balances on one or more of your cards to a balance transfer credit card, it’s more important than ever to compare credit cards before making a decision. A few years ago, a 0% balance transfer offer was a 0% balance transfer offer. The only real difference between offers was the length of time the introductory rate was in force. It was easy to compare credit cards then - how long does the 0% rate last and how much will it cost me when it ends?
These days there’s a bit more to it when you compare credit cards. Here are some points to look for when you’re choosing a balance transfer credit card.
1. What is the introductory rate and how long does it last? While there are still many 0% balance transfer offers around, the intro rates tend to be far shorter. In contrast, many credit card companies now offer introductory APRs from 4%-6% that last for the entire life of the balance transfer. In other words, if you transfer
