Get Your Debt Under Control
Credit cards are a convenient way to pay for things and manage your finances. However, credit card debt can quickly accumulate, and high-interest rates can make it difficult to pay off the balance. One way to address this is through balance transfer credit cards.
In this article, we’ll explain what balance transfer credit cards are, who is eligible for them, the best options available in the United States and Australia, and when it may be appropriate to consider a balance transfer credit card.
What are Balance Transfer Credit Cards?
Balance transfer credit cards are credit cards that allow you to transfer your existing credit card debt to a new card with a lower interest rate. In other words, you are moving your debt from one card to another, ideally with a lower interest rate. This can help you save money on interest charges and pay off your debt faster.
Typically, balance transfer credit cards offer an introductory 0% interest rate for a limited period of time, which can range from six months to two years, depending on the card. During this introductory period, you won't have to pay any interest on the transferred balance. After the introductory period is over, the interest rate will increase.
Who is Eligible for Balance Transfer Credit Cards?
Balance transfer credit cards are generally available to consumers who have a good credit rating. If you have a low credit score, you may not qualify for a balance transfer credit card.
Additionally, some cards may require a minimum credit limit or a certain level of income to be eligible.
When to Consider a Balance Transfer Credit Card
A balance transfer credit card may be a good option if you have a significant amount of credit card debt and are struggling to make your monthly payments. By transferring your debt to a card with a lower interest rate, you can save money on interest charges and pay off your debt most often faster.
However, it’s important to note that a balance transfer credit card is not a magic solution to your debt problems. You still need to make your payments on time and pay off your balance before the introductory period ends.
Top Balance Transfer Credit Cards in the United States
- Citi Simplicity Card: This card offers an introductory 0% APR for 12 months on balance transfers, with no annual fee or late fees. After the introductory period, the interest rate will increase to a variable APR of up to 29.49%, depending on your creditworthiness.
- Chase Freedom Unlimited: This card offers an introductory 0% APR for 15 months on balance transfers and purchases, with no annual fee. After the introductory period, the interest rate will increase to a variable APR of up to 28.49%, depending on your creditworthiness.
Top Balance Transfer Credit Cards in Australia
- ANZ Low Rate Credit Card: This card offers an annual fee of $0 in the first year, $58 thereafter. After the introductory period, the interest rate will increase to a variable APR of 12.49%.
- St. George Vertigo Platinum Credit Card: This card is available for an annual fee of $99 with up to 55 interest free days on purchases only. After the introductory period, the interest rate (purchase rate) will increase to a variable APR of 12.99%.
Eligibility and How to Apply
To apply for a balance transfer credit card, you must be at least 18 years old and have a good credit score. You should also have a plan to pay off the balance transfer within the introductory period to avoid accruing interest. It's important to note that applying for a balance transfer credit card may temporarily lower your credit score.
To apply, you can visit the credit card issuer's website or call their customer service line. You'll need to provide your personal information, including your name, address and social security number. You'll also need to provide information about your income and employment.
When is a Balance Transfer Credit Card Appropriate?
A balance transfer credit card can be a good option if you have high-interest credit card debt and want to consolidate it into one payment with a lower interest rate. It can also be a good option if you're planning a big purchase and want to spread out the payments over a longer period without accruing interest.
However, it's important to have a plan to pay off the balance transfer before the introductory period ends to avoid accruing interest. You should also avoid using the balance transfer credit card for new purchases, as they may accrue interest at a higher rate than the balance transfer.
Final Notes
A balance transfer credit card can be a great option to save money on interest and pay off debt faster.
When choosing a balance transfer credit card, consider the length of the introductory period, the interest rate after the intro period, and any balance transfer fees. It's also important to have a plan to pay off the balance transfer before the intro period ends to avoid accruing interest.
With the right balance transfer credit card and a solid plan, you can take control of your debt and improve your financial situation.