Another Protest Scheduled Against Big Banks
The outrage toward large banks continues.
Fresh off the heels of consumer protests over monthly debit card fees and “Bank Transfer Day” is a new movement that speaks out against high credit card rates.
December 11 has been deemed “Balance Transfer Day” where consumers are encouraged to switch from high interest credit cards to lower or zero rate cards.
The Balance Transfer Day’s Manifesto statement on FaceBook encourages consumers to “demand the same 0% interest rate that banks receive from the federal government” and “create our own bail outs by using a balance transfer as a means to bail ourselves out of credit card debt.”
Criticizing high interest rates is a fair point, and encouraging cardholders to transfer balances to a card with a lower rate can help save them money in interest payments. This is a good reminder to shop around at other banks and credit unions to see if you can get a better deal, especially as you start the new year with resolutions to improve your finances. However, getting a lower credit card rate may not be as easy as transferring your account to another bank. The rates you receive are based on your credit score. If your score is low, then your interest rates are going to be higher and you are going to have fewer options. The only real way to pay 0 percent interest on a credit card is to pay off the entire balance each month.”
Tips When Transferring a Credit Card Balance
* Balance transfers are usually not free. Most come with a balance transfer fee, typically 3% or 4% of the total amount you transfer. However, Chase is currently offering a special balance transfer offer on the Slate card where there is no transfer fee. Before you apply for any balance transfer card, do the math to see if the amount of interest payments you save with the introductory offer is more than the balance transfer fee that has to be paid immediately.
* If you feel you will be unable to pay off the entire balance during the introductory period, pay attention to the interest rate that you will pay after the introductory rate expires. In this case, a low APR for the long-term could be more important than the length of the introductory period.
* If you currently have a low credit score, you may not receive the introductory offer that is advertised. The ongoing APR you receive may be higher or your introductory period may be shorter. Or you may not be able to transfer your total balance.
* If you do transfer your balance, you must pay your credit card bill on time every month. If you have a late payment, your introductory period will likely end and you will be assessed the ongoing APR on the transferred balance.
* The introductory rate may only be applicable for the amount you transferred. Unless the introductory offer specifically includes new purchases, any purchase made with the new card will be at the ongoing interest rate.
* If the offer you receive does not meet your needs, decline the card. Limit the number of applications because multiple credit applications are a red flag on your credit report and can lower your credit score.
* The new issuer pays the amount of the balance directly to the old issuer and the amount you owe them will be reduced by the amount you transferred. The available credit on your new account will be reduced, as if you had made a purchase.
* It takes about four weeks for the balance to be transferred. Continue to make all required payments until you confirm that the balance transfers were made. Transferring a balance does not automatically close your old account. If you want to close that old account, contact the issuer directly.
Attractive Balance Transfer Credit Cards
Slate from Chase–Limited Time No Balance Transfer Fee No balance transfer fee for the first thirty days of account opening, a 0% introductory APR for up to 12 months on transfers and purchases, and no annual fee. The ongoing APR is 11.99-21.99%.
Citi Platinum Select
This card offers 0% interest rate for 21 months on both the balance transfer and new purchases. The balance transfer fee is 3%. The ongoing APR is 11.99-20.99%.
This special Discover More offer is for 0% interest on balance transfers for 18 months. Consumers also receive 0% on purchases for six months. The balance transfer fee is 3% and the ongoing APR is 11.99-20.99%.
Capital One Platinum Prestige
Consumers receive 0% interest until February 2013 on both purchases and balance transfers. The balance transfer fee is 3%. The APR is 10.90-18.90%.