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U R @: Education Center : Balance Transfers : Save with 0% APR Balance Transfers
SAVE WITH 0% APR BALANCE TRANSFERS
Overview
The 0% APR balance transfer is the lifesaver of the credit card world. When you apply for this type of offer, you can take balances from your high interest credit cards and defer paying interest for up to one year. If you haven't paid your balance in full at the end of the 0% period, you can opt to do another balance transfer and defer interest again.
There are essentially two types of balance transfers. A standard 0% APR balance transfer deal offers a special rate for a limited time, generally 6 months to 1 year, but charges a 3% balance transfer fee for every transaction. However, there a few credit cards that charge no balance transfer fees and offer a 0% APR. These are the best deals on the market.
Minimize Balance Transfer Fees to Maximize Balance Transfer Savings
To maximize your savings, look for a 0% APR credit card that offers no fee balance transfers. While these offers are hard to come by, they can provide anywhere from a few dollars to a few hundred dollars in additional savings. Here’s an example:
You have three credit cards. One has a balance of $2000, one has a balance of $3000 and the last has $1000. With most credit cards, you will be charged a 3% fee of up to $75 on each of the three transactions. In this situation, your balance transfer fees would be $165.
As you can see, opting for a card that charges no balance transfer fees can put a decent amount of cash back in your pocket. Unfortunately, there are currently no credit cards offering a 0% APR on no fee balance transfers. (Updated 31 March 2008)
Pay Fees but Save More
For some people, paying a balance transfer fee can actually save them money. Absurd as that may sound, most credit cards that charge no fees only offer a 0% interest rate on balance transfers. Thus, if you use your new or old credit card for purchases, you end up paying interest once again. In this situation, you may want to consider a credit card that offers a 0% APR for 1 year on everything (This is especially useful if you are only transferring one balance, and thus paying a maximum of $75 in fees.)
There are a wide range of credit cards that fit into this category, all of which can be found in the 0% APR section of SmartCreditChoices.com.
Last Words
While there are a number of factors to consider when making an online balance transfer, the two most important are the duration of the 0% APR and how much your balance transfer fees will be. For most, a 0% APR balance transfer that lasts for 12 months will provide much more savings than a no fee balance transfer will provide, especially given the lack of no fee offers currently available.
Should you have any questions regarding the balance transfer process, please feel free to contact us. At SmartCreditChoices.com, we strive to answer all visitor emails within 12 hours.
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