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Which Balance Transfer Option Is Best?

Credit card issuers are trying to gain new business by offering transfer optionsCredit card issuers have begun offering two balance transfer options to attract more business: a 0% interest rate for nine months or a 1.99% interest rate for 12 months.

If you have credit card debt, which one is best for you?

Here are two questions to ask:

What is your current interest rate? The higher the rate, the more attractive the 1.99% APR for 12 months on balance transfers becomes.

Yes, 0% for nine months means interest-free payments, but you don’t receive the benefit of three additional low-interest months.

If you don’t pay the balance in full after nine months, you’re back to high-interest debt.

How much debt do you have? The greater the amount of debt, the longer it will take you to pay it off. Therefore, if you currently have a high interest rate, the best option for you is the 1.99% APR for 12 months.

The only time a 0% APR balance transfer for nine months is the better option is when you can guarantee your balance will be paid off before the introductory rate expires or if you currently have a low interest rate.

If there is any chance that you still will have credit card debt, go with the safer option that provides you a longer promo period.

Of course, there are other balance transfer options out there.

Depending on how good of a credit score you have, you may qualify for a 0% APR balance transfer that allows interest free payments for a full 21 months. (See Citi Platinum Select Card.)

You can also compare balance transfer offers in our extensive credit card database.

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