Wednesday, July 24, 2013

Where Can I Find Free Balance Transfer Credit Cards?




Today, I'm going to talk about balance transfer credit cards. And, I feel it's important because I see more and more articles talking about free balance transfer credit cards. 

I can't tell you how many emails I've received asking me where to get free balance transfer credit cards. Just in case you don't have much time to read here, I want to tell you the truth up front...

There is no such thing as a free balance transfer credit card! Allow me to explain...

What Are People Referring To As Free Balance Transfer Credit Cards?


There are 2 things that may cause consumers to want to associate the word free with balance transfer credit cards...

  • Promotional Interest Rates – Often times, balance transfer credit cards come with 0% promotional interest rates. The promotional interest rates generally last anywhere from 6 to 18 months and for the most part, the rates are quite harmless. However, 0% interest doesn't ever mean free! It just means no interest.
  • No Balance Transfer Fee – A couple years ago it was pretty easy to find a balance transfer credit card that came with 0% promotional interest rates and no fee to transfer. Unfortunately, it's not that easy these days. As a matter of fact, I comb the market often and I haven't found anything in the past year or two that was worth applying for and didn't come with a transfer fee. So, it's my assumption that the no balance transfer fee promotions have come and gone...at least for now!


Let's Get To Reality!


OK, I admit, promotional interest rates are fun and, if I could transfer a balance without paying a transfer, that would be pretty cool too. But, these simple perks don't mean that the credit card is free at all. 


This is the biggest problem with balance transfer credit cards. So many consumers fall under a false misconception that balance transfer credit cards are a magical card that make all of your debts completely free. That's just not true.





Think of it from the lender's point of view. Most of the lenders are publicly traded corporations with stock holders to report to! If not, I can assure you that they aren't in business to lose money! 


If lenders gave you a credit card with any sort of available credit for free, with no interest, annual fee, or any other fee, all the money available on that card would be tied up in you. You, a borrower that they stood absolutely no chance of making money on. If they give that deal to you, they have to give it to others that meet the same qualifications that you do. 

Now, they've got millions of investor dollars tied up in loans they can't make a penny on! That simply won't work.

For the concept of balance transfer credit cards to work, there has to be some way for lenders to report a profit to the stock holders that own them! So...

Where Does That Profit Come From?


That really depends on the lender and offer you are working with. Every balance transfer credit card out there comes with it's own, very unique set of terms and conditions. If you have a credit card, you will pay fees in some way if you carry a balance. 


To be sure of what fees you're going to find yourself paying, it's important that you compare the market and take the time to read the rates and fees section of the terms and conditions for any offer you're interested in.

Final Thoughts


Balance transfer credit cards are usually great offers. However, they aren't designed for everyone as no financial option truly is! That being said, before you ever apply for an offer, make sure to compare the market and find the best one for you. 

Also remember, that there is no such thing as a free balance transfer credit card so, expect to pay fees to carry a balance!


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