AUSTIN, Texas, Jan. 8, 2015 /PRNewswire/ -- The typical credit card balance transfer offer has become more generous, but consumers have to act quickly to take advantage, according to a CreditCards.com analysis of 100 popular credit cards' offers to new customers.
Compared to the same survey a year ago, more cards offer a balance transfer promotional rate for at least 12 months (38 to 33). The number of cards with an offer lasting 15 months or more is also up, from 10 last year to 17 now.
But the survey finds there are also good reasons to comparison shop -- and to act quickly. Fees vary, and the majority of the cards that offer introductory balance transfer rates give cardholders only 90 days or fewer after the account opens to take advantage of the lowest introductory rates. That means that if you wait too long to transfer your balance to your new card, you could miss out on the 0% deal altogether.
"Timing is everything when it comes to balance transfers," said Matt Schulz, CreditCards.com's senior industry analyst. "It's absolutely critical that you not wait to transfer your balance to your new card, but it's even more important that you pay that whole balance off before the introductory period ends."
Total Cost to Pay Off a $5,000 Credit Card Balance in One Year
- With a 0% balance transfer offer (assuming a 3% balance transfer fee and a 12-month 0% introductory APR): $5,150.00
- With an average (15% APR) credit card: $5,415.48 ($265.48 more than the 0% balance transfer offer)
Here are some more highlights of the survey:
- Out of the 100 widely held cards that CreditCards.com examined, 85 allow balance transfers. Of those, 44 are advertising limited-time balance transfer rate promotions with discounted interest rates.
- Nearly all of those 44 promotional offers include 0% introductory purchase and balance transfer APRs for a set period of time, typically 12-15 months. An additional nine cards offer a 0% introductory rate on balance transfers but not purchases.
- The typical balance transfer fee is 3%, although some charge a higher rate if consumers don't act quickly. CreditCards.com also found 10 no-fee balance transfer offers, but there's almost always a catch: Just two offer discounted interest rates (one is 0% and the other is 4.99%). The rest range from 12.90% to 24.90%.
After the introductory period, the average balance transfer credit card charges an APR of 12.86%. The highest APR that CreditCards.com found was 26.99% (the cardholder's credit score is a significant factor). Because the offers can vary so widely, it's critical to do your homework.
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CreditCards.com surveyed a representative sample of 100 credit cards from all major U.S. card issuers in December 2014. Information was gathered from the cards' terms and conditions documents, any publicly available cardholder agreements and phone calls to issuers.
CreditCards.com, named a "Best Site for Managing Your Credit" by MSN Money, is a leading online credit card marketplace, bringing consumers and credit card issuers together. At its free website, consumers can compare hundreds of credit card offers from America's leading issuers and banks and apply securely, online. CreditCards.com is also a destination site for consumers wanting to learn more about credit cards. Offering advice, news, features, statistics and tools, CreditCards.com helps consumers make smart choices about credit cards. In 2014, over 22 million unique visitors used CreditCards.com to find the right credit card to suit their needs.
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