Many credit card companies offer very low interest rates to consumers who have a balance on another credit card that they wish to transfer. Zero percent interest on all balance transfers is often advertised. There are several things that a card holder should consider when electing to transfer a credit card balance from one card to another. First, consumers should be aware that the low rate is usually only applicable to the balance transferred and not to new purchases. The credit card company must disclose this information beforehand to consumers, but the consumer needs to be sure to read the fine print.

Shop Around

Just as with any loan or revolving credit agreement, consumers should compare offers. The APR or annual percentage rate is the first thing that most people notice and are likely to be attracted by, but there are other fees and terms that deserve attention. The credit card company will only offer the low rate for a short period of time following the balance transfer. This time period may be as short as three months and as long as a year. Those consumers with large balances to transfer, in an effort to pay them off more quickly and possibly at a lower rate than their current card offers, would be wise to shop for the card that offers the low rate for the longest period of time. These consumers would also be wise to avoid making any new purchases on the new card. If this card is to be used for new purchases, then the consumer must compare standard interest rates as well. The company will charge the low rate on the balance transfer and their standard rate on new purchases.

Other Considerations

Some cardholders have gotten into trouble with balance transfers, because they have neglected to continue to make on-time payments to their current card. Until the credit card company sends notice that the balance has been transferred and a new bill is received showing a zero balance, at least a minimum monthly payment should be sent. Payments received late by the credit card company will cause a fee to be charged and reflect negatively on a person’s credit report. Additionally a record of late payments may cause the new company to withdraw the offer of the low rate. Some companies charge a balance transfer fee, an annual fee, an application fee, etc. It is wise to read the fine print and compare these fees. Numerous fees can cost more in the long run than a higher interest rate depending on the size of the balance.