0% balance transfers are a great way to save money in the short term, free up money to pay off debt faster, and can save consumers hundreds or even thousands of dollars in interest over the course of their term. The best 0% balance transfer offers, on the other hand, only last for 15 months. Many people don't have enough time to pay off their credit card debt in this amount of time, so they have to decide whether to pay the new regular interest rate or move their balance again. Most people...
0% balance transfers are a great way to save money in the short term, free up money to pay off debt faster, and can save consumers hundreds or even thousands of dollars in interest over the course of their term. The best 0% balance transfer offers, on the other hand, only last for 15 months. Many people don't have enough time to pay off their credit card debt in this amount of time, so they have to decide whether to pay the new regular interest rate or move their balance again. Most people never think about getting a credit card with a fixed APR for transferring a balance. But this offer to transfer a balance is often the best choice for many people who use credit cards.
First, let me explain what could go wrong with a 0% balance transfer. My friend thought that if he moved his student loan balance to a credit card with 0% APR, he could save a few thousand dollars in interest. The fixed APR on the student loan was 7.99%. He thought he could save $1,600 on his $20,000 loan in the first year and then move the rest of the balance to a new credit card with 0% APR in the second year.
He didn't realise that it's not always easy to get a new credit card with 0% APR every year, especially if you already have a lot of credit card debt. When it came time to transfer the $18,000 he still owed on his credit card, he could only get a $2,000 balance transfer with no interest. He was stuck with $16,000 in credit card debt with a 12 percent interest rate, and time was running out on his other $2000 in debt. My friend got stuck in a credit card nightmare instead of a comfortable fixed APR of 7.99%.
Fixed APR balance transfer credit cards are a much better way for people to pay off long-term debt, like student loans or car loans, because the interest rate is always the same. Some credit card companies are now offering fixed APR credit card rates as low as 3.99% for the life of the balance. This rate is lower than many student loan and car loan rates, and people who have long-term debt can save 3 percent or even 10 percent each year by using this rate.
People who have a lot of credit card debt and want to get a second mortgage to pay off their high-interest credit cards can also use a fixed APR balance transfer. For example, a fixed APR of 3.99 percent might be less than the interest rate on a second mortgage, and there wouldn't be any expensive fees for refinancing. The fact that a fixed APR balance transfer doesn't take away equity from your home is much more important.
Balance transfer credit cards with 0% interest can save people a lot of money in the short term. In the long run, though, a fixed APR credit card is a good way to save money on interest for people who want to pay off loans and credit card debt with high interest rates over a period of more than 12 to 15 months. Imagine how much better off my friend would be if he moved his $20,000 balance to a credit card with a 3.99 percent fixed APR instead of getting greedy with credit cards with a 0% APR.
Credit Card Depot, Inc.
