These days the government is strictly regulating credit cards, but many people are still locked into accounts with high interest rates. Contacting the issuing company can occasionally result in the lowering of the rate, but a more effective way to save money is by opening a no balance transfer fee credit card.
Transferring balances from one credit card company to another often comes with a fee. This fee can be 2-4% or more of the balance being transferred, or a minimum of a certain dollar amount like $10. A no balance transfer fee credit card allows a person to transfer the balance of the high interest rate card to a new card at a lower rate of interest without accruing a service charge.
The best no transfer fee credit cards offer a special interest rate for a specified period of time. A prime example of this special rate is the 0% for 6 or 12 months offer. The discounted interest rate draws the consumer in by saving them a great deal of money and creates a relationship that will hopefully, at least in the company’s eyes, last beyond the life of the special offer.
When switching cards, it is important to choose a reputable company. Pre-approved offers are frequently mailed to consumers, but not all are on the up-and-up. If the company is not well-known, check with the Better Business Bureau to see if there are any complaints of poor business practices. Search the name of the company on the internet to see if there are any recorded scams before trusting the company with your finances.
All credit card offers are accompanied by a grid that explains the fees associated with the account. As important as a low introductory rate is, it is equally important to review what the interest rate will turn into after the special offer expires. A card at 0% for six months will not save money if the balance will not be paid off during that time and the interest rate increases to an astronomical amount thereafter. Look for additional charges like annual service charges, monthly processing charges, or even a monthly fee to have the primary plastic card or one for a secondary cardholder. As long as there are no hidden fees, taking advantage of a no balance transfer fee credit card can save a lot of money.