9 factors to know with 0 or low APR credit card balance transfer offers

1) Balance Transfer APR:
If you are applying for new card to transfer the balance, look for the cards that offer 0 APR on both balance transfers and purchases. This offer gives the flexibility to transfer the balances and also to make the purchases with 0 APR within the offer period. Usually look for the cards that offer 0 or low APR for balance transfers, check cash advances and direct deposits. If you can't find or not qualified for a card that gives such an offer, then try to find a card which offers the lowest APR for balance transfer, if your primary purpose of applying for such a card is only to transfer the balance. If you are qualified or get the approval for a card which offers the low APR only for the balance transfer, then make sure that you transfer only the balances from the other higher APR credit cards and not making any purchases using the specific card. 

Because if you make any purchase using this card, you will be charged the regular APR for the purchases and this regular APR will be applied till you pay off your transferred balances with low APR amount in full. The reason why the purchase charges can't be paid until you pay off the transferred balance amount is, usually credit card companies will apply all the payments you make to the lowest APR balances first. Since the regular purchase APR rate is much higher than the low balance transfer APR offered, whatever payment you make will be applied only to the amount that you transferred using the low balance transfer offer. 

If you already have one or more credit cards and you don't want to apply for a new credit card, then you can make use of the low APR balance transfers offered time to time by your credit card companies for the existing members. Usually credit card companies offer two types of balance transfer offers to the existing members. One is to transfer the balances with 0 or low APR for a fixed period or transfer the balances with fixed low APR till the balances are fully paid off. These offers will be sent by mail, or you will come to know about these offers by frequently checking your account online.

99creditcards.com offers the current list of low balance transfer offering credit cards by brands.

2) Balance Transfer Fee:
There will be a balance transfer fee applied to transfer the balance with low APR. This fee will be either a % of the amount transferred with no upper limit, or a fixed fee for each balance transfer irrelevant of the amount transferred. If there is a fixed fee applied then try to transfer as much amount as possible in one transaction. Transferring from each of the other credit cards will be considered as separate transactions. If the fee is charged as the % of the amount transferred, then you will have the flexibility to transfer from multiple accounts. Some cards will apply purchase APR on the balance transfer fee. Please find the APR that will be applied on the balance transfer fee, before you transfer the balance. You should try to select the card with no balance transfer fee, or with a fee, which is more suitable for your purpose. 

3) Card Annual Fee:
Usually the reward offering cards will charge an annual fee. Select the cards that don't charge annual membership fee, or be aware of any annual fee that will be applied on your choice of the card. Also find the APR applied on this fee if you plan to keep the balance on this card for few billing cycles. 

4) Offer Period:
If you want to make use of the balance transfer offers, select the cards that offer the low balance transfer APR for a longer period. This helps to reduce your interest payment, if you need more time to repay the balances that you would have transfered beyond the offer period. Though the purchase APR varies based on the prime rate, still you can select the card with the lower purchase APR at the time while you are looking for the balance transfer offers. 

5) Regular Purchase APR:
It makes more sense to select a card for balance transfer with purchase APR as low as possible. This will help to reduce your interest payment, if you can't repay all the transferred balance in full within the special balance transfer offer period. The prime rate used to determine the APR is the highest prime rate published in the Wall Street Journal on the first business day following the 22nd day of the calendar month before the month in which the billing cycle begin.  

6) Make payment on time:
The very important thing after you transfer the balance is to make at least the minimum payment on time in each billing cycle. Each time you default on the specific card or any other credit cards that you own from the same credit card company because you fail to make at least the minimum payment when due, exceed your credit line or your payment is not honored by your bank, then APR on your account may be increased up to a maximum of the default APR. Factors considered in determining whether and by how much to increase your APR include the frequency and severity of defaults and other indications of account usage. 

7) Offer ending period:
Make sure you transfer your balance before the offer ending period. Your transferred balance should be posted in your account before the offer ending period. Otherwise you will end up paying the purchase or the cash advances APR for the transferred balances, which are much higher than the special balance transfer APR.

8) Other APRs:
While applying for a card that offers 0 or low APR balance transfer, you should also be aware of the other APRs for purchase and cash advances, and how the payments will be applied. Few credit card companies consider the charges for the purchases of cash equivalents such as money orders, traveler's checks, foreign currency, lottery tickets, casino gaming chips, and the like as cash advances. Usually payments will be applied first to finance charges and fees, then to balance categories in the order of the lowest APR to the highest APR.

9) Transfer Restrictions:
Balance transfer from one credit card to another credit card is restricted, if both the credit cards are issued by the same company. Make sure that the card from which you want to transfer the balance is eligible to transfer to the card offers the balance transfer.

This article is published by the editorial team of
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