Credit Card: Balance transfer questions

What is my introductory interest rate?
Hopefully it’s zero percent! But even, say, 2.9% on a four-figure balance won’t cost you a ton of money.

How long does it last?
In recent years, introductory periods lasted as long as 18 months. Here and there, you’d even see deals offered for the life of the loan for transferred balances (but not for new charges). At the moment, however, 12 months is a good deal.

Is that rate only on funds I transfer over or on new purchases too?
It’s almost always only for transferred funds. Ask just to be sure–and to remind yourself to be careful with any new purchases (see below for more on this).

If the low rate is only for transferred funds, what’s the rate on new purchases?
It’s probably a more normal rate, between 10 and 20%.

If the low rate is only good on funds I transfer (and not new spending), do you apply my payments each month to the debt with the low rate first or the high rate?
This is where things get tricky. A card company will generally apply payments to your lowest-rate debt first. This is because they want you to keep the higher-interest debt longer, since they make more money this way.

The best bet here is to simply not use new cards that you’ve transferred balances to for any new purchases. Pay off the transferred balance, and then put it away.

Are there any fees for transferring my balance from an old card to your card?
There didn’t used to be many, but this has changed in recent years as consumers have gotten smarter about playing the balance transfer game. Sometimes it will be a percentage of your debt, and sometimes it will be a flat fee of some sort.

Will you waive those fees or give me any other break?
Probably not, but it never hurts to ask.

Do you reserve the right to take away my low rate if you see something you don’t like on my credit report in the future?
Most do, though a few banks have agreed to stop doing this. Chase is one.





This article was taken from: filife