Are Balance Transfer Credit Cards Worth It?

Balance transfer credit cards are a great way to save money on interest if you've got another credit card with a really high balance and you can transfer it into a new card with a better APR. But just like every single credit card out there when you get a new card there's always pros and cons and there are definitely some of these when it comes to balance transfer credit cards. Now the best reason in my opinion as to why you should be looking into a balance transfer credit card is because most of them offer 0% interest on balance transfers for up to 18 months. Now I got to be honest here most of the cards that you look into they're not going to hit the 18 month mark. Most of them are actually 15 months and then a few of them hit the 12 month mark. But if you're at least getting a year of interest-free credit card on that balance transfer then that can save you a lot of money on interest in the long haul. Because let's say that you have a credit card with a $7,000 balance and an 18% interest rate. Well if you take that $7,000 balance and you move it into a new credit card with a 0% interest rate then you're actually going to be saving about $100 a month in interest just because you moved that money from one interest rate into a much better one. But I will say that you do need a pretty high balance in order for this to be worth it and honestly unless it's really over about $5,000 it's probably not worth your time. Because if you have a $500 balance on your current credit card and you move that $500 into an interest-free credit card it's really not going to save you that much in interest and it's really not going to be worth the hassle unless you really do want that new credit card. Now the next reason why you should look into getting a new balance transfer credit card is because some of them will offer 0% interest on new purchases as well. So not only can you get 0% interest on your balance transfer but you can also get 0% interest on your new purchases. So those two categories that are going to be charging you interest you can get interest-free for a certain amount of time and sometimes that can be very handy depending on your budget situation. Just be careful here because a lot of the balance transfer credit cards that you look into are only going to have 0% interest on the balance transfer and not the new purchases. So if you want to get new purchases and balance transfer at 0% interest then make sure to do your homework and look for that specific type of credit card. And you also want to be wise here when it comes to your spending habits because if the whole reason why you transferred money from one credit card into a new credit card was to save money on interest then now if you're getting 0% interest on your new purchases and you transferred over that balance if you don't take care of that debt before the 0% ends then you're just going to be in a worse position than you were before you started with a new credit card. Because if you started out with a balance of $10,000 and then you moved it into a new card and racked up another $5,000 of debt and then the 0% interest ended well then now you'd have $15,000 as a total balance whereas before you only had $10,000 obviously that's a worse situation. So my advice here is if you do have a high balance on an old credit card and you move it into a new credit card with a 0% interest rate then just make sure that you get that balance paid all the way down before that 0% ends so that you can take advantage of that 0% as much as you possibly can. Now another good thing about balance transfer credit cards is that a lot of the time they're very competitive when it comes to rewards. So you might find that the new credit card you're looking into has better rewards than your old credit card. So not only can you get the perks of the 0% interest on your balance transfers or maybe even your new purchases but you can also have the potential of getting better rewards as well. Now at this point in the video if you are liking it can you please just give it a big thumbs up that way I can tell if you guys are liking this type of content or not. Thank you very much. Now out of all the cons that balance transfer credit cards have the worst one in my opinion is called the balance transfer fee and this is typically going to be 3% that you're going to get charged for the total amount that you're transferring. So for instance if you're transferring ten thousand dollars then you're going to have to pay an instant 300 bucks that's just a waste of money in the balance transfer fee and there's really no way around this because I have looked at a lot of credit cards and I've never seen one with a balance transfer that doesn't have a balance transfer fee. So even if the card that you're looking into has a 0% balance transfer interest rate it doesn't mean that they're not going to charge you the balance transfer fee because that's separate from the 0% interest rate. But I do want to make it clear that even with the 3% balance transfer fee you will save money over time on interest with the 0% interest rate especially if you're transferring a lot of money from one old credit card into that new credit card. So even though you have to pay that 3% fee it's inconvenient it's annoying you are going to save more money over time on interest if you're taking advantage of that 0% rate before it ends. Now another con that I want to mention when it comes to balance transfer credit cards is that once that 0% interest rate ends you might find that the new interest rate on the new credit card is worse than your old credit card. So now if you are carrying a balance you're going to be worse off because you're going to end up spending more in interest than you used to regardless of that 0% interest rate because once that 0% is over you have a new card that you need to worry about with their normal fees and their normal interest rates. Every single credit card that you look into will list their interest rate so if you're looking into a new credit card check what the interest rate is going to be after that 0% period and then also pay attention to your old credit card because you might find that the interest rate that you already have is better than the new credit card and maybe in the long run you're just better off keeping the old card rather than going with the new one. And another con that I want to mention here and this one's very simple but it's just the fact that if you are getting a new credit card all because you want to get that 0% interest rate on the balance transfer the rewards points might also be something that's worse than your old credit card. So pay attention to that when you're doing your research because the last thing you want is to have worse rewards on that new credit card because then it's just something else that's not benefiting you as much as the old one. Overall when it comes to getting a new credit card you want to end up getting one that you're going to keep for a very long time because as you keep that credit card open it is going to affect your credit score in a positive way because of your credit history. So when you're looking into a new credit card pay attention to everything. Pay attention to the interest rate, the rewards, the introductory offers, everything like that because you want to end up with a card that at the end of the day you don't want to feel like you want to cancel it you want to keep it because obviously that's going to help your credit history and your credit score will go up over time as long as you keep that credit card open. Now if you are interested in a good selection of balance transfer credit cards I have an affiliate link to creditcards.com in the description below so definitely check them out if you have an interest. But just please make sure that you do your research when you're looking at all of these different potential credit cards because at the end of the day you do want to keep them as long as you possibly can because that is going to benefit your credit because of the credit history.