The three types of balance transfer cards

Credit card users can save ample sums of money transferring their debt from one credit card to another. A balance transfer rate credit card permits card holders to pay off their debt faster, allows users to consolidate their credit card debt to fewer cards, and leaves users with the option to cancel their other cards.

However, not all balance transfer credit cards are the same. The terms vary between lenders and even types of cards. Some cards have additional flat fees applicable when a balance transfer is made, while others require that a percentage of the balance is charged. Certain cards have high annual fees that could possibly counteract any money saved in interest payments. The conversion rate is an additional factor that may differ from one card to another.

Overall, balance transfer cards can be grouped into three different categories:

Lifetime balance transfers

These cards charge a balance transfer rate anywhere between 4.99% and 9.99% for the entire life of the credit card. The card is ideal for users with substantial amounts of debt and card holders who do not foresee paying off their debt in the near future. The rates on these cards are generally more expensive than credit cards that offer a limited period low balance transfer rate. Lifetime balance transfer credit cards are somewhat rare on the market and, as a consequence, bring with them a high annual fee.

Extended period balance transfer credit cards

These cards offer holders a low rate on balance transfers for anywhere from nine months to two years, with a range in rates from 1.9% to 5.9%. These cards are the most practical for credit card users with sizeable debt. Though the extended period balance transfer credit cards do not offer zero interest on balance transfers, the rates are still substantially less than the interest charged on purchases.

Six-month balance transfer credit cards

These credit cards offer very appealing rates for a very limited time; for instance, rates frequently range from 0% to 7.99%. These are the most available balance transfer credit cards on the market and are best suited for consumers who are seeking to quickly rid themselves of an outstanding debt. With a zero interest balance transfer rate for six months, each repayment will be accredited to the debt, leading to faster satisfaction of the debt.