Beware of Balance Transfer Fees

If you have a credit card you have probably received balance transfer offers which offer to lower your interest rate. Make sure to factor in the balance transfer fees and to look at the actual interest rate before accepting one of these offers. They often have a 3% (or more) balance transfer fee that is applied to the entire balance you are transferring. And, many times balance transfers are charged a higher APR than normal purchases after the promotional interest rate expires.

Ad

For example, if you borrow $1,000 with a 3% balance transfer fee, six months at 0% interest, and a default 18% balance transfer APR then over the course of a year the transfer will have nearly a 12% effective APR for that first year. Beyond that, you are paying 18% on that debt.

By Fisher

Comments

Add your voice! Click below to comment. ThriftyFun is powered by your wisdom!

Related
In This Article
Bank Column
Saving Money on Banking
Next >︎
Categories
Budget & Finance Credit CardsJune 15, 2006
Guides
Writing a check
Saving Money on Checks
Woman Speaking with Credit Union Teller
Using Credit Unions
Banki ATM machine.
Banks With No Minimum Balance Requirement
Avoiding ATM Fees
Avoiding ATM Fees
More
🎄
Christmas Ideas!
Facebook
Pinterest
YouTube
Contests!
Newsletters
Ask a Question
Share a Post
You are viewing the desktop version of this page: View Mobile Site
© 1997-2016 by Cumuli, Inc. All Rights Reserved. Published by . Page generated on November 26, 2016 at 7:51:39 AM on 10.0.2.215 in 2 seconds. Use of this web site constitutes acceptance of ThriftyFun's Disclaimer and Privacy Policy. If you have any problems or suggestions feel free to Contact Us.
Loading Something Awesome!