Money-au

Balance Transfer Credit Card Explained:

Balance transfer credit cards rank as the best way off paying off credit card debt. Basically a balance transfer as the name suggests, enables borrowers to transfer existing outstanding balances onto a new card that charges a low introductory interest rate for a limited time only.

The introductory interest rate applies anywhere between six to twelve months. Card issuers use balance transfer offers to attract new customers. Balance transfers are particularly suitable for borrowers looking to pay off debt rapidly and for this type of borrower these deals are good.

Borrowers should be aware of a couple of things when comparing balance transfer credit cards. First, missing even a single payment is going to result in much higher interest rates. Secondly when transferring balances, card issuers charge a fee based on the amount of debt being transferred. This charge varies between issuers; however the average is 3%.

Borrowers should be realistic about balance transfer deals. For example, a borrower who transfers existing debt onto a new lower interest card should be realistic about whether they are able to pay most if not all of the debt during the introductory period.

Some credit cards even offer balance transfer deals with a zero per cent interest rate, however these tend to be very few and far between and such deals usually come with very strict terms and conditions, including a shorter introductory period, higher transfer fees and more expensive annual fees.

If you cannot find a balance transfer deal that offers zero per cent then there are still plenty of other cards which have very low introductory interest rates on balances transferred, and are much better than the 20% borrowers are likely paying on their existing debt.

Regardless of which type of credit card you are looking for, Money-AU will link you with a variety of lenders who offer a range of different options for people looking for the best credit card deals in the market.