If you have any credit card debt, one of the best things you may do is to get a balance transfer credit card. Many credit card companies and banks offer this type of card, and it can be really beneficial to you to get a good one, the best ones come with 0% Interest. How does a balance transfer card work? When you owe money to other credit card companies or have certain types of other unsecured debt, you could transfer some or all of that debt to a new credit card.
When you sign up for the new card, you have the option of putting those other forms of credit debt onto the card. Not all balance transfer cards provide the same benefits, though, so you will need to look around. If you have good credit, you can get one with 0% interest. Of course, this interest rate is only good during the introductory period, which will vary between credit cards.
When you go to apply for this type of credit card, be sure that you know how long the 0% interest rate applies to your transferred debt. This can range anywhere from about 6 to 21 months. This means you could go for close to two years without having to pay any interest on your debt. This benefit could give you the time you need to pay that debt off completely, or at least reduce it considerably before the regular interest rate applies. Before it expires, you could get another card to transfer your balances to, if necessary.
Balance Transfers and Purchases
Card companies may not attach a fee for the privilege of adding your debt to their card, but some will. This could be a percentage of the amount transferred, such as three to five percent. Some cards will not charge anything to make the transfer. There may also be an annual fee on the card, but other ones will not have a fee. These cards may or may not allow you to add purchases at zero interest, as well. If they do, it may be for a different time frame, so be sure to find out the details. Other cards may only offer the zero interest rate for transferred balances but may charge the regular interest rate on all purchases.
Other Credit Cards Benefits
Another benefit that this kind of card may have is that some of them will let you earn rewards or get cash back. Some cards will give you:
- Many points towards rewards
- A cash bonus if you purchase so much in charges within a specified time
- Cashback, or even double cash back – on some purchases
Rewards such as cash back can enable you to get as much as 5% of your purchases back in some categories.This will usually be for purchases made at:
- gas stations
Balances transferred to the card do not earn any rewards or cash back rewards. A lower percentage may be offered on other types of stores. Some cards keep the percentage of cash back on certain types of purchases the same – even after the introductory period has expired. There may also be a cap on a number of purchases made within a year that can earn cash back. A few cards may give you cash back at a specified rate for all your purchases. This percentage is apt to be a little lower, such as one or two percent. When you get a card that lets you transfer balances to it, remember that there is a specified interest rate associated with the card. It will take effect as soon as the introductory period ends. If you are not aware of it, it could come as quite a shock as soon as the new charges are first applied. The best option is to get a card with a low of an interest rate as possible.
Low Interest Credit Card Options
Trying to find the right credit card to apply for to make the purchase with understanding how to make those purchases with the right credit card will save you money. There are many different credit cards that offer deferred interest. Deferred interest is where there is a promotional period on the card where you do not have to pay interest on purchases. Knowing which cards you want to apply for that are offering this can help you decide which card is right for you. For example, if you are planning to make an expensive purchase, a card that offers deferred interest may be of use to you because it will allow you the time to repay that purchase without having to pay more for the purchase in interest costs. Many different cards offer low-interest rates and deferred interest. The odds of getting low-interest rates are higher if you have better credit. However, some cards, even when you have bad credit, may offer deferred interest.
Citi Simplicity Card
Their promotional deferred interest period is for 21 months. This means that if you are making a large purchase you have plenty of time to pay it off for almost two years. In addition, their low-interest rate starts at 14.99 percent. In addition, this card is advertised as having no penalty fees, as in no late fees, or annual fee. You can also set up your own bill payment schedule on a date that is most convenient for you.
This card has a low variable APR rate starting at 11.99 percent. In addition, there are no annual fees to use this card. The deferred interest rate is for 6 months which means that it is another card that is great to use if you are making a purchase that you will need extra time to pay off. For 18 months they also have no interest on balance transfers. Furthermore, when your first year of having the card is over Discover offers to match your cash back earned throughout the year. You can redeem your cash rewards when you want because there is no expiration date.
Chase Freedom Unlimited
The current promo on this card is no interest for 15 months. After 15 months, your interest rate is variable starting at 15.99 percent. There is no annual fee for this card and it also offers friendly cash back reward of 1.5 percent on every purchase automatically. When you make purchases of $500 or more within the first three months of opening the account you can earn a bonus of $150.
The Amex Everyday Credit Card
Deferred interest on this card is for 12 months. In addition, there is no annual fee and the interest rate is variable starting at 13.99 percent. There are also a lot of flexible rewards available with this card. For example, if you use your card at least 20 times during one billing cycle you earn 20 percent more points on those purchases you made. There is no annual fee, and they offer 2x the award points for purchases made at supermarkets. This card is recommended for good to excellent credit.
Wells Fargo Platinum Visa
This card offers a deferred interest period of 18 months. The APR on the card is variable starting at 16.15 percent. In addition, the card offers a cellular telephone protection program where they will pay for your damaged or stolen phone. If you use your card to pay your monthly phone bill then you may be eligible for this plan.
Which Card Should I Choose?
Many of these cards offer better deals with certain types of purchases. Rewards programs can be more beneficial when you choose a card tailored to your lifestyle or needs. You will have better APR options with good credit. If you are building credit or reforming credit your APR will be higher however, you can work toward lower rates with good credit history. Remember that rewards programs and cash back rewards help you get the most out of your credit card. But, with larger purchases comes larger debt, do not be enticed by rewards programs to charge more money than you need to on your card. Use these cards as tools to help you make specific purchases to avoid not being able to pay back your purchases before the deferred interest promotions are over.