Article Central at FastCreditCardOffer.com

Balance transfers have become an extremely popular way to save money on credit card interest and are a common device used by credit card companies to woo you into their client base.  With so much competition for your business card companies are constantly trying new things to make their offers more appealing.

The latest tactic - a seemingly amazing deal - "Credit Cards with No Balance Transfer Fee".

The going rate for a balance transfer is 3% of the amount transferred (with or without a fee maximum) which means a balance transfer of $10,000 could cost up to $300 to switch to a new card.  That's pretty steep but are the new credit cards with no balance transfer fee really any better than the cards with a 3% transfer fee?

First Things First

Before you can know for certain that a balance transfer offer is good you have to gather a few facts. 

• For starters you need to know the terms of your existing credit card.  You will need the current balance and the current interest rate - both should be plainly marked on your most recent statement.  Use these figures to determine what you pay in interest each month - or just figure up the average amount of interest charged over the last 6 statements.  You are not looking for precise numbers but you do want to be close.
• Next, you will need to take a close look at the credit card offer you are considering.
  • Is there an introductory period?  If so, how long is it and what is the interest rate while it lasts?  (Balance transfer offers typically have an introductory period of 6 to 15 months and should offer a better interest rate than your current card.)
  • Does the introductory rate apply to balance transfers or just to new purchases? (If it doesn't apply to balance transfers then what's the point?)
  • Is there a fee to transfer balances?  If so, how much is it?  Is the fee capped or unlimited?  (Basically, you want to know exactly what it will cost to transfer the balance from your current credit card.)
  • What will the interest rate be after the introductory period is over?  Is it better than what you pay on your current card?  (Although I can think of a few exceptions, as a general rule, the after-intro interest rate should always be a better rate than your current card.)
  • Is there an annual fee?  If so, what other features does the credit card offer and will you use them?  (Travel rewards are great, but if you haven't left town in the last 10 years, who cares?  Never pay an annual fee unless you are certain you will benefit from doing so.  There are just too many cards out there that offer competitive rewards without charging an annual fee.)

How Do Ya Figure?

Now it's time to crunch some numbers.  To figure it all out, let's take a look at two balance transfer offers that include typical balance transfer fees and one credit card with no balance transfer fee.

The balance on the card we want to transfer is $10,000 and has an interest rate of 21.99%.

Almost Perfect:

Of course the examples above are not perfect because there are so many variables that come into play when it comes to credit card calculations but it should be enough to tell you that a longer introductory period at a significantly lower rate will beat a credit card with no balance transfer fee any day of the week - even with a ridiculously high balance transfer fee.  Also, I didn't take into account the fact that during the 15 months being compared there should have been healthy payments made in order to bring the balance down rather than keeping it at a consistantly high amount.

As for the credit card with no balance transfer fee vs. the typical offers having the same intro length, as you can see the difference is only the amount of the balance transfer fee.  If there is some other feature in the card offer you are considering that is worth the cost of the balance transfer fee to you - by all means - go for the credit card with the features you want.  It will ensure that the card serves you better in the long-run.

Conclusion:

There is no shortage of credit card offers available both in your mailbox and online.  Don't be in a rush.  Take the time to do the math and compare.  The important thing is to read all the terms and conditions and know what you will be getting before you apply.  When you find a deal that works for you - go for it.

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Where Next?

Start saving money today!

View all balance transfer credit card offers currently available.
or
View only the credit cards with no balance transfer fee.