Compare Lifetime Balance Transfer Credit Cards

August 5th, 2010

If you have a large credit card debt to pay down and limited resources to do so, you’d be well advised to look at life of balance transfer credit cards.

This is especially important if you’ve previously made use of zero interest rate balance transfer credit cards, or cards with a low interest rate for a limited time.

Most folks manage to pay off their credit card debt over time without too much disruption to their lives. But if you find you have accumulated a larger debt, and you can’t attack it too rapidly without depriving yourself of everything else you need, then you’d better start looking at the best ways to compare life of balance transfer credit cards.

Time Is Of The Essence

Time limited balance transfer cards are good for paying down debt without too much pain, but some people find six months or even a year is just not long enough to achieve their goals, either because their debt is too large or they just don’t have the income to take care of the debt.

Having established the best ways to compare life of balance transfer credit cards, your first shock may be to find that the typical interest rate these sorts of cards charge ranges from 5% to 9%, which doesn’t sound too good when lined up against 0% interest over six months.

The crucial difference is the interest rate over time. Paying off a debt at 5% or 9% for as long as the debt lasts is usually a better deal than paying off the same debt at 0% for six months, and then the rest at 15% or 20%+ interest.

Chasing The Zero Strategy

Some people try to follow a strategy of paying off their debt at 0% for six months and then switching the remaining debt over to a new card at 0%. The flaw with this strategy is that the credit card issuers quickly become aware of what’s going on through their credit checks and they stop issuing cards to people who change too often.

Obviously the key point to look for in the best ways to compare life of balance transfer credit cards is the interest rate that will apply. The lower the better, especially if the debt is to be paid off over a long period.

Other Fees

There are other points to look for: some cards charge a balance transfer fee, typically a small percentage of the balance being transferred. You need to include that charge with the annual fee to see if it makes a difference in what you will save over a long period.

Other rules to remember are:

no new purchases with the card while paying off the debt
make the balance transfer as soon as you get the card
pay at least the minimum amount on time every month, otherwise you may void the low interest rate.