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Here are a few instances in which a balance transfer might be a good idea:
There are two types of balance transfer credit cards — rewards credit cards and cards with a long 0% intro APR period on balance transfers. The benefits and drawbacks vary based on your card choice.
Transferring your balance to another card often comes with fees of either 3% or 5% of the amount transferred, with a minimum of $5 to $15. Some credit cards have 0% balance transfer fees, which makes them an ideal option if paying off your debt is your only objective. Because you’ll likely pay a fee, consider these two questions to calculate if the balance transfer will be worth it:
When all is said and done, you’ll want to pick the option that lets you pay less. But to make the math even easier, consider using our balance transfer calculator.
Use our balance transfer calculator to find out how much you could save by making a transfer and if it will be worth it.
Some banks allow a minimum of $100, others may set the minimum at $500.
In terms of maximums, it depends on the institution. Typically the maximum sits either up to 100% of your approved credit limit or up to a certain amount — say $5,000 or $15,000.
Confirm what the minimum and maximum transfer amounts are by checking your card’s terms and conditions.
You generally can’t transfer your debt to a card with the same bank. Cobranded cards and shop cards may not be transferred to some providers. For example, you can’t transfer a balance from a United℠Explorer Card to a Chase card because it’s issued by Chase.
Your low or 0% intro balance transfer rate only lasts for the length of the promotional period, after which it will revert to a much higher interest rate. If this rate is higher than your current one, it may not be worth transferring the balance if you can’t pay the balance off before the intro APR period ends — though this also depends on the balance transfer fee.
This depends on the financial institutions involved. The time it takes for a balance transfer to complete is two weeks on average. The balance transfer intro period may begin as soon as a bank approves your account, though some don’t start it until the transfer is complete.
Also, if you don’t have any debt, you’re better off applying for a credit card with a rewards program.
Balance transfer credit cards are a poor choice if you want to earn rewards on travel purchases. Not only do they lack solid rewards on airfare, hotels and cruises, but they’ll likely come with a 3% foreign transaction fee.
If you’re looking to pay off your debt faster and without interest, a balance transfer credit card could be worth considering. You can choose between rewards credit cards with a shorter intro APR period and cards with a longer intro APR period but without a rewards program.
If you’re still not sure whether a balance transfer credit card is what you need, compare other credit cards until you find the right fit for your needs.
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