What’s the best way to find the best balance transfer credit card?
If you have good credit, (FICO Score 740 or above, usually) these offers will come to you, unsolicited. However, if you are looking for one, simply “Google it!” There are dozens of articles on the web, touting lower rates, etc. As with anything “on the web,” always consider the source. There are reasons for congress eventually getting around to passing consumer protection laws, as weak and ineffectual as they are.
Why do you need good or excellent credit to get the best balance transfer credit cards?
As with any business, customers who shop regularly and pay their bills on time are appreciated. These clients tend to use their cards more often, generating revenue for the card companies from the businesses that accept your card. Each card transaction costs the merchant 1-4% of the total sale.
As an aside, from time to time, especially of larger purchases, you might want to ask the seller directly, “If I pay cash, what is the price?” You will often find the seller willing to lower your price 1-4%, for cash purchases.
What’s the biggest mistake people make with balance transfers?
There are a number of them. First and foremost, doing balance transfers should NOT be a way to gain access to further lines of credit. Once the transfer is completed, you should close the old account, or at a minimum, remove the card from your wallet and store it with your safe papers, at home, or safe deposit box. Secondly, READ THE FINE PRINT. If you violate the terms of the agreement, you will lose the benefits of the 0% and $0 transfer. Instead of better rates you can end up with extremely high rates, and your entire balance will become subject to these higher rates. In addition, read the offers carefully because card companies purposefully obfuscate. There are usually minimum fees associated with each transfer, even some of those touting 0%.
Why aren’t there more 0% balance transfer credit cards with $0 transfer fees?
The basic answer is supply and demand. As I said above, if you have excellent credit, these cards come looking for you. If you don’t, they really do not want you as customers, using these cards. Banks and credit card companies actually benefit from people with less than excellent credit, because these customers tend to carry balances month to month, and pay higher interest rates, over a longer period of time. Read the information on your most recent credit card statement. Look at the true cost of credit, if you have a balance and you pay the minimum payment.
What is the best way to profit from successfully doing a balance transfer, or for using credit cards at all? (Bonus Question from ME!)
Start with the knowledge that credit cards are NOT your friend. They are a tool developed and refined over the past five decades, stating with the Diner’s Club card in the 1960’s…until today, when even indigent people possess them. Their sole purpose is to produce income or revenue for the card issuers. They are sold to the public as “…convenience and safety, because you don’t have to carry cash.” In reality, credit cards, and today, even debit cards, separate you from the reality that “You can’t afford it.” With “easy credit,” you can afford anything. Right?
Here is a success story for you to absorb and hopefully, emulate.
Secure a credit card with the best rate you can qualify for. Make sure it is a card with cash benefits (I used the US Bank Harley Davidson Card.) Rates aren’t really the primary consideration, since you won’t be paying their rates anyway. It’s the benefit you are pursuing. Charge everything on this card that you possible can. At month end, pay off the card, in total, every time. No Exceptions.
“But,” you ask, “what if I charge too much and I can’t pay it off?” Then you are not responsible enough to follow this plan. You will simply have to go on overpaying for services and paying interest rates geared only to serve the needs of the card companies. For those of you capable of following this plan, read on.
At month end, after paying off your card balances you will have earned cash benefits. Over time, month after month, these benefits add up to significant savings. This is not theory, it is what I have done, since October of 2015. Over the past three years, I have averaged over $75 in cash benefits, monthly, from my US Bank Harley Davidson card. These benefits have been used to purchase accessories for my 2015 Harley Davidson Tri Glide Ultra, as well as pay for my regular maintenance service visits and for purchasing motor clothing, including helmets, boots, leathers, denim jeans and various shits and t-shirts.
To date, I have not paid one cent to the bank for the ability to use their card for my benefit. The merchants from whom I have purchased products and services have paid US Bank merchant fees, but I have not had to pay them anything. That is the right way to use credit cards.
If you are not a Harley Fan, find a different card with different benefits. My dad’s bank, BB&T, pays cash benefits on his credit card. Those benefits can be used to purchase Visa Cards, usable, like any other Visa Card, anywhere Visa Cards are accepted…or any number of other gift cards from dozens of businesses.
“But what if I need to use my credit cards to get by, month to month?”
In reality, most people need a little time, occasionally, to bounce back from over indulging in credit card use. When that happens, remember, the sooner you pay the balance off the better it will be for you. Remember also, as hard as it is for you to accept, especially if you are under 35 years of age, there will be times when you simply have to tell yourself, “I can’t afford this right now” and walk away. If you need to use a credit card to get by “month to month,” you are in reality, Bankrupt. See an attorney, clean it up, and start your life over with a clean slate and a better financial understanding of the real world…which for your sake, I hope will not include overutilization of credit cards again.