If you’re considering one of the many balance transfer cards, you’ll want to do a little homework first. Though the first and most important item that most of us focus on with balance transfer cards is the promotional or introductory rate, it’s important that you also consider the regular APR as well as any fee that you’ll be charged and whether there is a cap or minimum/maximum limit on the fee.
Some credit cards will charge a percentage of 3% or more but they’ll offer some protection for large balance transfers by putting a cap or limit on how much the fee can be. In general, the max caps for balance transfers are somewhere around $75. However, if a card doesn’t have a cap and you want to transfer $5,000 for instance, you could be paying as much as $150 ($5,000 x 3%) for the transaction.
In spring of 2006, Chase created a bit of an uproar when they eliminated caps on many of their balance transfer cards. Caps and transaction fees can vary dramatically from credit card to credit card. And, bottom line, the only way to know for certain whether a balance transfer card is a good deal or not is to check the fine print located in the disclaimer when you apply.
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