Zero-percent introductory balance transfers are quite tempting, so they`re among the most popular credit card offers available. These cards generally only carry the 0% interest rate for one year after the date of the balance transfer, after which the rate increases, often drastically.
Another alternative is a lifetime balance transfer deal, which offers a fixed rate for the lifetime of your balance. These rates can be as low as three or four percent, which is often better than the resulting interest following the end of any 0% introductory offer. The trick is figuring out what you need to do in order to keep that low interest rate for the life of your balance.
Some credit card companies require you to make more purchases in order to receive the low permanent rate. If you are transferring a high balance to make it easier to pay off the debt, this could prove quite costly. Certain credit cards have touted a 0% interest rate for the life of the balance, but require customers to make at least two purchases per billing cycle in order to lock in that rate. This makes it difficult to pay off the balance or even simply pay down debt. One way to work around this type of deal is to make miniscule purchases, even as small as a dollar or less, to qualify for the two purchases per billing cycle. Unless the credit card policies state otherwise, there is generally no minimum requirement as far as the cost of the required transactions is concerned.
One thing that`s appealing about 0% introductory rate offers as opposed to low interest rates for the life of the balance is that the terms give you a set amount of time during which you need to completely pay off the balance. Since you won`t be charged interest for the first year, you can figure out how much you need to pay toward the balance per month in order to get the debt paid before the higher interest rate sets in. This can be more difficult if you are required to make two purchases per month with a 0% lifetime card.
But a low interest rate on a lifetime balance credit card is not a bad idea, especially if you don`t have a high balance and can afford to pay off the debt in total at the end of every month. The downside is, as with most other credit cards, if you miss a payment or are even a day late, you can expect a higher interest rate to kick in. Not paying your bill on time will always result in these types of consequences, which are detailed in the fine print.
Either one of these credit cards can help people rebuild their credit, but lifetime balance transfer cards can be harder to get for those with poor credit. Making regular monthly payments that are higher than the minimum amounts can get you out of debt faster, improving your credit score to make it possible for you to qualify for a mortgage or any number of financial products.