Balance transfers credit card offers are offers by a credit card lender and a way in which credit card consumers can have their interest cut by hundreds of dollars a year. Before you rush out an apply for a balance transfer credit card it’s important to remember that balance transfers can charge fees and you should understand how those fees are charged.
A balance transfer credit card is a credit card account opened for the purpose of transferring an outstanding balance from another credit card presumably at a very low or 0% interest rate.
Some instant approval credit cards offer introductory balance transfer rates that are every bit as competitive as the best in the marketplace including 0% balance transfer credit cards.
The main reason a consumer would go through the hassle of tranfering a balance because the new card offers low interest rates. This low interest rate may be an introductory offer which lasts for a few months or it may be at a higher interest rate than the introductory offer but lasting for a longer time.
A balance transfer fee is essentially an administrative fee that is charged to make sure that the balance transfer goes through. Some credit cards do not charge it, as many borrowers are becoming more aware of it and factoring it into their calculations. However it is not a prominently advertised fee and can add to the interest that is actually being paid. A balance transfer fee is generally calculated as a percentage of the balance that is being transferred on to the card. This is typically 1% or 2% of the card balance. Sometimes a flat fee may be charged, however this is somewhat rare.
While credit card balance transfer fees exist there is also often a limit on balance transfer fees and this particularly relevant on large balance transfers than the percentage rate. The limit will say that there is a maximum fee of $X, or it will say a balance transfer of up to $5,000 will be charged.
The balance transfer limit is more important on the larger sums than the balance transfer fee percentage. If large amounts of money are being transferred on to the card then this can make a balance transfer fee irrelevant. However in some cases the credit card balance transfer fees are charged for each balance that goes on to a credit card, so if three cards are having balances transferred then the three cards will have three separate balance fees calculated.
 |
||
| ANZ Low Rate Purchases : 0% for 3mths (Offer ends 12.06.12) then 13.39% p.a. Balance Transfer: 0% for 3mths Annual Fee: $58 Interest Free Days: Up to 55 Cash Advance : 21.49% p.a. More Info |
||
| ANZ Low Rate Apply Now |
