Best Balance Transfer Credit Cards

May 5th, 2010

A credit card is a very handy financial product when everything is running smoothly. When you can make your repayments on time, cover the cost of the purchases you make on the card and don’t have to worry about mounting interest charges on a mounting balance, then your credit card can be an asset.

However, if you lose control of your spending, or you keep spending on your card when your circumstances change and you can’t cover your repayments, you can find yourself in need of a balance transfer credit card.

2.99% p.a. for 12 months

The best balance transfer credit card deals:

Pay off your high interest credit card with a lower interest card.
Offer you a much lower interest rate on your credit card balance.
Offer you a lower balance transfer interest for a limited time, or for the life of your balance.
If the balance transfer deal expires before you have repaid your balance, the low interest rate reverts to a much higher one.

Types of Balance Transfer Credit Card Deals

There are several different types of credit card balance transfer deals which may help you get control over your spending. So find out more about the:

Low interest credit card balance transfer. This type of balance transfer deal offers you an interest rate which is just a fraction of a standard credit card rate, for a limited time. This could be six, nine, 12 or even 18 months, but the important thing to remember is that a low interest rate balance transfer deal does expire.
A 0% balance transfer credit card deal. Sounds like the best option, but this may not always be the case if you need a long time to repay your balance. A 0% balance transfer deal is usually only offered for six months, after that the non-existent interest rate becomes more than standard.
A for life balance transfer. Will offer you a lower rate for as long as you need to repay your balance. While the interest rate on a for life balance transfer deal will usually be slightly higher than that on a low interest rate balance transfer, it will still be much lower than your standard card, and will never expire.
A 0% balance transfer and purchase credit card deal. This is a deal where the balance transfer rate and the purchase rate of the credit card remain the same, for the same period of time. Therefore, where you normally shouldn’t spend on a balance transfer credit card until you’ve repaid your balance, in this case the balance and the new purchases will be charged the same low rate.

How to Compare the Best Balance Transfer Credit Card Deals

Before you simply seek out the first balance transfer deal you find with a low interest rate, make some informed comparisons to ensure you don’t get into the same credit card trouble you’re in now:

Check the revert rate. This is the interest rate your balance will be charged if you don’t pay it off within the balance transfer deal term. This can often be the cash advance rate of the card and can be as high as 21% however, other revert rates are simply the purchase rate so make sure you compare.
Can you repay your balance within the offer period? If you don’t think you can, consider whether you’re willing to apply and reapply for a new balance transfer credit card at the end of each deal – keeping in mind each credit card application ends up on your credit report. Alternatively, choose a balance transfer for life deal, or a longer low interest rate deal.
Compare the features of the card for keeps. In the interests of reducing your number of credit card applications, compare the features of the credit card, not just its balance transfer offer, when you apply. In this way you can keep the same card once you have repaid your balance, and this time you’ll have all the features you need to keep out of trouble.