How Do 0% APR Balance Transfers Work,

Whether you are paying a 10% interest rate or 20% interest rate, a 0% balance transfer can save you hundreds of dollars a year in interest. 250 on interest this year. That's a fairly sizable price for what many consider a small amount of credit card. In this article, we will explore the simple process of doing an online balance transfer and examine the potential savings. Step 1 Visit a credit card comparison site to find a credit card that charges a 0% APR on balance transfers for one year.

This part shouldn't be too difficult, as many credit cards provide these offers. Keep in mind, however, that you can't transfer a balance to a new card from the same issuer. Thus, if your debt is with one bank, you must transfer it to a different bank. This does not mean you can't transfer a balance from one Visa to another.

Step 2 Before you apply, closely review the credit card's terms and conditions. Some credit cards advertise a 0% APR for 1 year, but upon closer look, reserve the right to only offer the 0% rate for 3 to 6 months. Step 3 Once you've determined that the length of the balance transfer is 1 year, take a look at the interest rate offered at the end of the introductory period.

Try to find a credit card with a low long term APR. However, if you do not repay your balance in full by the end of the 0% period, you can always look into transferring your balance again. Step 4 Now that you've found the right credit card, complete the online application and submit your balance transfer information online. Doing a 0% balance transfer online is a simple process that can save you hundreds, if not thousands of dollars in interest over the course of a year.

If you are currently paying your credit card company money to borrow funds, balance transfers are an easy way to stop this trend. All it takes is ten minutes to get a new credit card. There are very few other things you can do to save this much money so quickly. And there are very few reasons not to take advantage of 0% balance transfers.

Many companies nowadays offer low APR credit card application to attract customers and encourage them to sign with their company. So what should one do before completing a balance transfer application, Like a business credit card application, an application for a balance transfer requires serious thought. First, you have to ensure that you have a good payment history to be allowed to do the transfer. In addition, it is necessary that you examine the terms and conditions with utmost care especially the fine print so that you can watch out for common pitfalls.

Some companies may offer low or 0% APR balance transfer credit card application much to your delight but then it will dismay you to find out that the other costs such as annual fees are extremely high. Furthermore, you have to see to it that the balance you are going to transfer does not go over the credit limit of the new card.

1. Is there an introductory interest rate available, How long is this period, A number of companies offer low or 0% interest rates for balance transfer credit cards. This is great in the sense that it will reduce your monthly finance charges for a certain time. Most of these introductory rates last from six months to one year.

2. What is the regular APR after the introductory period is over, This is a crucial piece of information that you should know about since the savings that you have made from enjoying a 0% or low APR introductory rate would be worthless if the normal rate were very high.

You may end up spending even more. 3. How much are the balance transfer fees, You have to ensure that there are no hidden charges. Transferring your balance to a new credit card is the first step in organizing your finances and getting a better deal. Keeping these three major points in mind will help you successfully choose the credit card that best suits your financial needs. Always be sure to carefully read the terms and conditions set forth in the credit card issuers disclosure statement before you apply. It is important that you fully understand interest rates, fees and billing cycles.

A 0% or low-interest credit card can be a lifesaver — and is definitely a money-saver — if you're looking to pay down debt or finance a big purchase. Cards with 0% APR periods will save you the most on interest in the short term. Look for one with an introductory interest-free period longer than a year. If you tend to carry a balance most months, a card with a low ongoing interest rate will work to your advantage in the long run.

Your money may soon be more valuable. If you're indebted, I'm sorry to say that your debt is only getting more expensive. Either way, the Federal Reserve's decision to boost interest rates by 25 basis points, a 0.25-percentage-point increase, will likely affect you soon. The Fed's decision affects the prime rate, which is generally the best lending rate offered by banks.

Banks are expected to increase the prime rate from 3.5% to 3.75% in the coming weeks. In turn, the annual percentage yields on your savings and the annual percentage rates on your outstanding credit card balances and future transactions can be expected to rise. In fact, your credit card APR will probably see a 0.25-percentage-point increase in the next couple of months.

Your issuer might not even tell you the change is coming: Under the Credit Card Act of 2009, issuers don't have to notify you when your card's rate rises with the prime rate. But it can sure cost you. The rate hike affects your credit cards because their rates are variable, not fixed. But the effect is a little different from other types of credit card APR increases.

If your issuer raised rates to make more money, for example, the Card Act would prevent the issuer from applying those higher rates to your existing balances; the new rates would apply only to transactions made after the increase. But when the prime rate rises, the Card Act allows issuers to raise the rates on your outstanding balances in addition to your new transactions.