Balance Transfer Credit Card – Benefits of Competition
The balance transfer credit card is one of the starkest examples of how competition benefits the end consumer. Consumers with good credit and high credit card usage can use balance transfer credit card to save dollars from a few hundred to much more depending on their credit card usage and the amount of balance transfer.
In simple terms, if you have good credit, companies are looking to provide the offer, even if they do so at a lower rate of interest. You benefit from low interest and they acquire a valuable customer. So, a balance transfer credit card enables you to transfer your existing balance or even debt to a credit card with low or no interest.
Credit Card Balance Transfers Math
A look at the math of a credit card balance transfer will make the situation clearer. For instance, suppose you apply for balance transfer credit card from a reputed online vendor. Now, your interest on credit card debt runs up to, say $1450 dollars a year at an average with your credit card that has an APR of 10.99% assuming you have a good credit rating. Now the competing credit card company offers you a credit card with a 0% introductory APR for the first 12 months. By making a simple balance transfer to your new credit card, you save on one year’s credit card interest. Now that is math that one can live with!
Shopping Guide To Balance Transfer Credit Cards
Initially consider the size of the balance transfers to be made, and correspondingly the amount of financial gain that follows. The period of 0% APR is important, how much credit do you expect to use, and correspondingly how much interest will you save from credit card balance transfers during the offer.
Do the balance transfers incur a transaction fee and if so how much? Consider how long the introductory APR lasts and the APR after that in your calculations. And, as always, be sure to read the fine print. You don’t want to encounter unexpected costs. The best offer sometimes is not the one with the lowest rate of interest.
Balance Transfer Trivia
The best type of balance transfer credit cards are the ones with a 0% rate of interest. Many companies have begun offering such cards, at an incredible introductory period of up to one year. It is possible to transfer your debt to a credit card with a 0% APR, and then retransfer it to another one at the end of the introductory APR period on the existing card. However this is not a recommended action as it can result in a lower credit rating for you. Credit card balance transfers can be done online; most companies offer this system of balance transfer.
Credit Card Balance Transfers In A Nutshell
Substantial savings can result if you get you balance transfer credit card arithmetic right. Before applying for one look, be sure to look at the fine print. Good financial sense with credit card balance transfers can make for good finances. If you have spent substantially utilizing "plastic" money, a balance transfer credit card just might make good financial sense for you.
Bank of America - A long road to the countries top credit card issuer.
Bank of America is currently the largest issuer of both credit and debit cards in the United States. It is also third in the nation when measured by assets and handles about 10% of deposits made in the country.
Open for business in 29 states, it's a safe assumption that Bank of America is a large force in credit and banking. More evidence supporting my very vague claim can be drawn from the bank's purchase of MBNA last year. MBNA was formerly the largest issuer of credit cards in the country.
More interesting than its acquisitions and statistics is Bank of America's history. The bank's roots, while wide-ranging, can be followed all the way back to the Bank of Massachusetts, which was the hot new thing on the block back in '84. 1784, that is.
Perhaps more interesting than a few lame history facts would be Bank of America's curious checking policy that landed them in court in 1999. The policy is that the biggest check is processed first, regardless of chronology. Some people (namely the sort that filed the lawsuit over this) felt that it was a technique to drive up overdraft charges. For example, say you have $11 in your checking account. Like I do. Maybe $11.50. Anyway, you have $11 and you cut a check for $0.25, for a piece of bubble gum. Then you issue another check, this time for a chocolate bar for $0.75. Then another check for a movie, we'll say a matinee for $5.00. Finally you go home and pay a utility bill for $396.78. Clearly you will be hit with an overdraft charge. However, Bank of America would process the bill first, then the movie, then the chocolate, then the gum. You would be charged four overdraft charges. Quirky, isn't it? Well, maybe not so much. Wachovia, Chase, and Citibank also do the same thing. The suit ended with a $9 million settlement.
That wouldn't be the last time Bank of America would find itself in court. In 2004 the bank was accused of assisting in the fraudulent activities of a quaint little company called Enron (settled for $63 million). The same year a California jury decided the bank illegally tampered over a million customers' Social Security Benefits. That case may cost the company over $1 billion.
But hey, you know, it's America, half of our idols are in court all the time. We shouldn't begrudge Bank of America for doing what banks do, which is usually finding clever ways to make more money at the everyday person's expense.
So aside from a tainted recent reputation, the bank still does plenty of business issuing more debit and credit cards than anyone else. That's not a combined figure, Bank of America tops both types of cards. Their recent $35 billion dollar acquisition of MBNA rounded out their line-up with a plethora of affinity and specialty credit cards second-to-none. Take a look at your card, you might not be too surprised to see who issued it.