Balance transfer credit cards are indeed blossoming again and are getting back. But what is the purpose of balance transfer cards?

Balance Transfer credit cards refer to a card that allows you to transfer the balance from another account. It provides consumers with 0% interest or 0% APR on their balance for a limited time.

Since it is easy to stretch up the balance when you purchase with a credit card, some people end up with immense debt. Also, the average interest rate of credit cards is more than 17%; they find it tough to pay off the debt. In this case, they opt for the balance transfer cards.

It is a beneficial tool for the person in debt, as what you pay as the bill of credit card adds to your principal amount. Also, you start saving on the interest of credit cards when you choose balance transfer cards.

What type of Debt can You Transfer To Balance Transfer credit cards?

Generally, you can transfer high-interest debts to your balance transfer credit cards. It is up to the card issuer which type of debt you can transfer. Some issuers let you transfer personal loans, home loans, etc., but some wouldn't allow transfers from internal accounts.

Why have Balance Transfer Cards made a comeback?

The statement that "credit cards are subjected to market prerequisites" is 100% true, and credit card schemes depend on the condition of the market.

By the summer of 2020, balance transfer credit cards were removed from the market and were unavailable. This was due to the pandemic and unemployment. As compared to the start of 2020, unemployment peaked in April 2020. And also, over the first quarter of that year, various banks tensed their lending norms of loans and credit cards.

Banks drew back their balance transfer cards to lower their risks. But with time, things returned to their tracks, and in April 2021, the unemployment rate decreased from 14.85 to 6.1%.

According to the 2021 survey of the Federal Reserve, banks were relieving their norms of lending money. Gradually, the balance transfer credit cards were taking their way back and returning to the market again.

Which Balance Transfer Credit Cards Are Currently Available?

There are various balance transfer cards available to you. Given below are some favored balance transfer cards which are available in the market

U.S Bank Visa Platinum Card

The introductory APR is 0% on the balance transfer and purchases for the 18 billing cycle, and then the variable APR of 18.74%-28.74% is charged. There is no annual fee, but a balance transfer fee of 3% of the amount per transfer or a minimum of $5 is charged.

BankAmericard Credit card

This card's APR is according to their terms, and there is no annual fee. But you must pay a balance transfer fee of 3% of the individual transaction amount or $10.

Wells Fargo Reflect Card

There is 0% APR on balance transfers and purchases from account opening to qualifying balance transfers till 21 months. Then the ongoing variable APR of 17.24%-29.24% is charged.

Till 120 days of account opening, you have to pay a balance transfer fee of 3% of the amount per transfer or $5. After 120 days, you must pay 5% of the transfer amount and a minimum of $5.

Citi Rewards Card

The balance transfer fee is 3% of the amount per transfer or $5. From the date of the first transfer till 15 months, there is 0% introductory APR on the balance transfer and the same on the purchases from the account opening date.

After that, on your creditworthiness basis, you have to pay a variable APR of 17.74%-27.74%.

Discover It Balance Transfer

The introductory APR is 0% on the balance transfer for 18 months and purchases for 6 months. After that, you need to pay a variable APR of 15.74%-26.74%.

The fee you need to pay for the balance transfer is 3% for the first few, and later you have to pay 5% of the amount per transfer.

The details of only a few cards are mentioned above. There are various other balance transfer credit cards available to which you can opt depending on your needs. The APR and fees for the transfer of balance can vary from card to card.

But there are some terms and conditions which you need to qualify for getting a balance transfer credit card. If you do not qualify, you can go for other convenient and cheaper ways like personal loans, buy now, pay later, etc., to pay down the balance.

FAQs

Is it a good idea to use balance transfer credit cards?

It is an excellent idea to use balance transfer credit cards to pay off your current credit card debts. Since credit card interest rates are as high as 30%, you can transfer your balance to a balance transfer credit card which offers 0% APR.

What credit score is needed for balance transfer cards?

You need an excellent credit score to qualify for a balance transfer credit card. Generally, if your credit score is 670 or greater than this, you are qualified for a balance transfer card.

Do banks charge for a balance transfer?

The banks charge a fee to transfer the balance to another card, known as the balance transfer fee. Different banks charge different amounts of fees depending on the amount transferred.

Conclusion

If you have a lot of debt, then balance transfer credit cards are the best option to free yourself from debt. It would be best if you do your research before going for any balance transfer card.

It would be helpful if you were honest with yourself. Before applying for a balance transfer credit card, you should know the amount of debt you owe and then research and choose the best balance transfer credit card according to your needs.