Zero Balance Transfer Cards

When switching a credit card balance to a zero percent credit card there are almost always fees involved. If it is a true 'fee free' card then it will only apply for a limited amount of time. If you are transferring a balance of more than five thousand dollars most credit card and financing companies will give you six to twelve months of penalty free use of the card but that will be retroactive to the sign up date. That could mean that the six to twelve months of interest free float you had will be added to the total amount due on the credit card.



A true fee free credit card transfer only involves a few steps. It starts with an approval process to verify your identity and the total amount due on a credit card. Once that is established the original credit card company is contacted and the balance due is transferred to the new zero percent interest balance transfer credit card. This can take up to ten days to process since it involves two individual companies.



All fees from both establishments are disclosed prior to any execution of the transfer. Fees for a balance transfer credit card transaction could include a wiring and transfer fee, currency exchange penalty and loss of accrued interest if it was part of a money market account. In addition to fees for the balance transfer to a new credit card, there could be limitations set in place that lock you in to a binding contract for a set term. This prevents people from transferring the balance multiple times to different financial institutions. The maximum penalty set forth by the FDIC is 4% but banks and lending providers can add other fees in the form of overdraft fees, zero balance transfer card cancellation and over-the-limit fees.




There are two types of balance transfer credit cards; ones that offer an interest and ones that do not. Generally zero interest balance transfer credit cards offer a longer term while those offering one to two percent earned interest will offer a shorter term. Depending on the stipulations established when the balance was transferred the accrued interest from the grace period could become payable and added to the outstanding balance of the transfer credit card account.



Online and internet banking service providers offer the greatest selection of no interest balance transfer credit cards. This can be a beneficial option for those seeking specific rewards for purchases or for signing a transfer contract for a year or more. Most of the information can be processed online and anything that needs to be submitted to process the no interest balance transfer ca be faxed. Some companies will even waive their processing fees for larger outstanding debts.



Once you have obtained a zero interest balance transfer credit card it is your responsibility as the card holder to follow the repayment rules that were established when the account was approved. A grace period for repayment can allow the card holder ample amount of time to establish a repayment schedule. By using a zero interest transfer credit card you can pay off a larger portion of the debt because payments made within the time frame are credited directly to the debt itself without upwards of twenty percent of the payment amount going towards interest fees.