Low Interest Credit Card Balance Transfer

Low Interest Credit Card Balance Transfer: Pros and Cons

A low interest credit card balance transfer offer can be tempting, but is it really a good idea? Or is it one of those offers that are too good to be true? While the offers are usually legitimate, there are both advantages and disadvantages to a low interest credit card balance transfer. Here are some things to consider before signing up for an offer from a [statetitle] bank:

Interest Rate vs. Transfer Fee: Before signing on the dotted line, look at the bill from the credit card with the existing balance. Check out the annual percentage rate (APR), then look at the low interest credit card balance transfer offer and see if there is a transfer fee. Often the transfer fee is a percentage of the amount transferred, and there is sometimes a maximum fee listed. Take out your calculator and determine whether you'll actually save money by making the transfer.

Timeframe of the Offer: Some low interest credit card balance transfer offers state that the lower rate will be in effect for a certain number of months; others state that the low interest rate is valid until the debt is paid off. If there is no expiration date and the numbers from your calculations add up, it probably makes sense to do the transfer.

Your Ability to Pay: If your financial situation is stable and the numbers add up, making the switch is a good idea. If, however, you're unsure about your ability to make the minimum monthly payments, or if the interest rate will go up before you can pay off the debt, it's probably better to stay put. You don't want to double the trouble and have two credit card monthly minimums that you can't afford.

Is a Better Offer Available: Sometimes your bank in Hornick IA may be able to match the low interest credit card balance transfer offer, or offer you a personal or home equity loan that comes with a lower interest rate. Shop around and visit your Hornick IA banks to see if there's another option.

Low interest credit card bank transfers make sense for some people, but less so for others. Weigh the pros and cons before making a decision.