Take Control Of Your Financial Health With These Balance Transfer Cards From Our Partners

When selecting a credit card, consider these six key factors:

1. Credit Score and History: Your credit score influences approval and card options. Excellent credit opens doors to premium rewards.

2. Welcome Offers: Many cards provide sign-up bonuses; compare these perks, as they can significantly vary.

3. Rewards Type: Choose between points, miles, or cash back based on your spending preferences and redemption goals.

4. Rewards Categories: Opt for flat-rate rewards for simplicity or bonus categories that align with your spending habits.

5. Annual Fees: Evaluate if a card’s benefits justify annual fees; both fee and no-fee cards can be worthwhile.

6. Interest and Fees: Be mindful of interest rates and fees, especially if you plan to carry a balance or seek a low-interest card.

Considering these aspects ensures your chosen card aligns with your financial needs and spending patterns.

Credit card options cater to various financial goals, but the array can be overwhelming. To simplify, we’ve categorized them into five types:

1. Travel Credit Cards:

• Focus on earning points or miles for travel-related rewards.
• Benefits include airport lounge access, travel credits, and elite status with loyalty programs.
• Ideal for those wanting travel rewards and enhanced travel experiences.

Compare travel credit cards.

2. Cash Back Credit Cards:

• Earn cash back instead of points or miles.
• Redeem for statement credits, deposits, checks, or gift cards.
• Suitable for those prioritizing cash back over travel rewards.

3. Balance Transfer Credit Cards:

• Offer a 0% intro APR on balance transfers for a specified period.
• Useful for transferring debt and avoiding interest charges temporarily.

Compare balance transfer credit cards.

4. Credit Cards for Building Credit:

• Designed for individuals with fair, bad, or no credit.
• Includes secured and unsecured options to help build credit history.
• Ideal for those aiming to qualify for better cards in the future.

Compare secured credit cards.

5. Business Credit Cards:

• Geared towards small business owners with business-related benefits.
• Helps separate personal and business expenses for tax purposes.
• Suitable for business owners seeking perks tailored to their needs.

Getting a new credit card might have adverse effects on your credit score through two avenues:

1. Lenders conduct a hard inquiry on your credit reports, leading to a minor decrease in your credit score.
2. The introduction of a new credit card reduces the average age of your credit accounts, potentially impacting your credit score.

While hard inquiries linger on your credit report for two years, their impact on your credit score usually lasts for just one year.

TIP: Not all credit cards require a hard inquiry to open. If you are worried about hurting your credit score, consider a credit card option that does a soft inquiry instead.

Credit card issuers and lenders usually report your monthly credit usage. Therefore, it’s advisable to use your credit card regularly. This practice contributes to building your credit score and ensures the continued activity of your credit account, provided you make full and timely payments.

TIP: If you want to keep your credit utilization low while still using your credit card monthly, use your credit card as the auto-payment for small, monthly purchases like subscriptions.

Closing a credit card can harm your credit standing by decreasing your available credit, thereby elevating your debt-to-income ratio. It is generally recommended to keep accounts open unless there’s a compelling reason to close them. An example might be closing a card that imposes excessive fees.

A balance transfer card allows you to move balances from other credit accounts, potentially securing a lower interest rate and saving money over time. For instance, if you have debt with a 15% APR, transferring it to a card with a 0% introductory rate on balance transfers could provide a period without interest charges. However, it’s essential to consider balance transfer fees, typically ranging from 3% to 5% of the transferred balance. Assess the potential savings on interest versus the transfer fee to determine if it’s a financially sensible decision. Be cautious about paying off the balance before the introductory period ends to avoid additional interest charges.

When evaluating balance transfer cards, consider these key factors:

1. Length of promotional offer: Opt for a card with a 0% intro APR for 12 to 18 months to maximize time for debt repayment without interest charges.

2. Regular APR: Look for a card with a lower regular APR post-promotion to minimize interest costs if you carry a balance.

3. Annual fee: Choose a card with a low or no annual fee to keep costs down.

4. Balance transfer fees: Be mindful of fees, usually 3% to 5%, and seek cards with lower fees or introductory fee waivers.

5. Issuers: You can’t transfer balances within the same issuer; explore options from different companies.

6. Rewards programs: Assess if the card offers rewards, considering bonus categories aligned with your spending habits. Check for extra perks like cell phone protection and ensure the rewards structure aligns with your preferences. Choose a card that combines savings on interest with rewarding features.

A balance transfer may aid debt consolidation but may temporarily lower your FICO score due to a hard credit check during the new card application. Multiple inquiries in a short period can reduce your score. Approval can decrease the average age of your credit accounts, slightly impacting your score, even with excellent credit.

To mitigate the impact, avoid closing current credit cards, and maintain on-time payments to build good credit. While a new card application affects your score, paying off the balance within the 0% APR period can improve your credit utilization ratio, potentially boosting your credit score over time.

The timeline for transferring your credit card balance to a new card can differ by issuer, typically ranging from a week to a maximum of 21 days. Additionally, some cards with promotional balance transfer rates may have specific timeframes for completing transfers after account opening. It’s crucial to be attentive to such details when choosing a balance transfer card.

The amount you can transfer to a new credit card is contingent on your credit limit. If, for instance, you hold $10,000 in credit card debt and the new 0% intro APR credit card provides a credit limit of $6,000, you won’t be able to transfer the entire balance.

Moreover, factoring in the balance transfer fee is crucial. The combined total of your transfer amount and the balance transfer fee should not exceed the overall credit line available on your new balance transfer card.

TIP: Make sure to always pay your credit cards with the highest APR first. If you believe a balance transfer is the best option for you, prioritize transferring the balance of your highest APR card.

Completing multiple balance transfers, especially to cards from different lenders, may indicate broader issues with your debt. While a balance transfer can create the illusion of better debt management, engaging in more than one suggests potential spending or cash flow challenges.

Before pursuing another balance transfer, scrutinize your credit card statements for areas to cut back. Establishing a budget and exploring avenues to increase your income can help you regain financial control.

If you’re dealing with multiple balances, a personal loan for consolidating your debt could be another viable option.

Transferring balances can be a smart move if it helps you save on interest. Shifting from a high-interest credit card to one with a lower rate can lead to long-term savings, aiding in debt reduction and financial management. When considering a card with an introductory balance transfer APR, thoroughly review the card details before applying.

Moreover, if you seek additional benefits beyond the 0% intro APR on balance transfers, many cards offer enticing perks like introductory offers on new purchases, cashback rewards, bonus points for specific spending categories, flexible redemption choices, or features such as lucrative sign-up bonuses, no foreign transaction fees, and extended warranty coverage. These extras can prove valuable, especially if you plan to use your new card for significant purchases with a gradual pay-off.

Failing to clear the balance on your new credit card before the introductory period concludes means your remaining balance will be subject to the regular APR, leading to accruing interest and an increase in your owed amount. Completing a balance transfer won’t effectively reduce your debt unless you budget to allocate funds toward your debt each month for repayment.

TIP: If you have a high balance and are worried about your ability to pay off the balance in full in a short amount of time, consider balance transfer cards with the highest introductory APR periods. Some may offer a low or no-cost APR for 12 months while some may offer a low or no-cost APR for up to 18 months, giving you more time to pay off the balance before the regular APR goes into effect.