Many Consumers Not Taking Full Advantage of Balance Transfer Cards
Balance transfer cards are designed to help cardholders consolidate their credit card debt or achieve a lower interest rate for those debts. Most come with a 0% APR introductory period, where no interest is accrued on the transferred balance for a certain number of months.
In order to maximize this opportunity, it’s important to pay off the transferred balance in full before the introductory period is over. Otherwise, a large amount of additional interest fees will be tacked on to the balance.
According to a new survey, only 59% of cardholders have paid off their balance transfers before the end of the introductory period. Another 22% said they paid most of the balance, and the remainder had only paid a part of it.
Balance transfer cards remain a popular choice for Americans. In fact, 41% say they have had a balance transfer card in the past. That number increases with income. A staggering 69% of respondents with a household income over $100,000 have used a balance transfer card at least once, and 47% have transferred balances more than once. Only 28% of households earning under $50,000 had used a balance transfer card.
Men were significantly more likely than women to pay off their transferred balances in full (70% vs. 43%) and more likely to get a balance transfer card in general (54% vs. 31%).