There’s a lot of consumers in debt and they’re trying different options to reduce their debt. One of those options in through the use of credit card balance transfers. On the surface balance transfer are great and can potentially save you a lot of money over the long run. There are still some concerns you should have before you make the switch.
Balance Transfer Fee Expensive
Most balance transfers that are offered via a credit card such as getchaseslatecharge 3% on the balance. Depending on your debt load 3% can be an expensive initial fee to transfer debt.
You will have to look at the bigger picture and consider how much money you will be saving with this transfer. If you are moving to a credit card that is offering 0% interest over 18 months then you will have to do the calculations to project how much money you will be saving. Afterwards determine if the 3% transfer fee is minimal or not.
Credit Score Affected
To apply for a balance transfer credit card and opening an account will require the financial institution to do a hard inquiry into your credit report. This will definitely reflect in your credit score which may cause it to decrease.
If you’re concerned about your score and don’t want to see it drop then you will need to reconsider the balance transfer option. You will also need to factor in how much of your balance transfer balance will be eaten up with your transfer. If it is more than the 30% utilization then your credit score again will be dinged.
These are issues that need to be discussed and thought out before choosing a credit card offering balance transfers.