With the New Year coming right around the corner it seems like the credit card companies are out in full force trying to recruit new members. There is no better time to review the best offers on the market for 2012. Having the right credit card that fits your spending habit is good plan, not only is it the financially responsible thing to do it’s just a smart move.
Credit cards can get a bad reputation, as the fees and interest start to pile up on your monthly statement. There are credit card offers out there that give you cash back, miles or points, not to mention the 0% transfer balance offers as well.
There haven’t been too many credit card companies offering the 0% transfer card since the CARD Act in 2009. The Credit Card Accountability, Responsibility and Disclosure (CARD) act regulated the different company’s discretion in changing interest rates on cardholder accounts.
This regulation required all the promotional rates to remain in place for at least 6 months. In Turn, the credit card companies charged a balance transfer fee to compensate for the longer promo period. The old standard perks like no fee balance transfers or long introductory periods at 0% soon became a thing of the past.
Let’s fast forward to the return of the 0% percent balance transfer card. Credit card companies are wasting no time offering these transfer deals again. Among these deals for 2012 are the no fee balance transfers with a 0% APR for an intro period of 24 months.
So what kind of balance transfer card offer is the best?
Ifyou have a small balance, let’s say one that you can pay down in less than a year, then you could probably skip the balance transfer fee and go with the shorter 0% balance transfer introductory APR. A 4,000 balance that is not accruing interest can generally be repaid at the rate of $334 per month. If you’re OK with those terms, then you really don’t need to have to pay the 5 percent balance transfer fee.
On the other hand, if you have a big balance that you don’t plan on paying off in a year, it might be worth it to pay that 5 percent balance transfer fee to be able to reach the longer 24 month 0% APR.
For example let’s just say you have a 40k balance and you can only repay $1,200 a month, not even close to being able to get rid of that balance within 12 months. You’d do better after two years by just paying the initial balance transfer fee to get your 2 year pay down period with no interest.
If you have a balance that you are ready and able to pay off and can commit to reducing your debt, rather than just creating more, then this type of offer will be the tool to help you achieve that.
So compare credit cards to find the right zero balance transfer card that will work for you and your financial situation.