Q: I just want to get my credit cards paid off with a lower interest rate, and do not want the cash back or other incentives. Who is offering the lowest rates at this time?
A: If, like many Americans, the recent recession forced you to take on a little extra credit card debt, finding a great balance transfer offer can really help you close some gaps in your budget. Lenders have shifted their approach to balance transfers over the past few months, trading off some of their long-term profit potential for a short-term service fee.
Because banks usually fund cash back rewards cards with revenue from interchange fees, card offers designed to capture existing debt from rival lenders sometimes trade off these perks but charge no annual fee. Some of these "no frills" cards could help you accomplish your goals.
If you're bristling at the balance transfer fee, remind yourself that you'll save money if you're currently paying an APR higher than 3 percent on your existing credit card.
Keep in mind that shifting a large balance from one card to another could set off alarm bells at one or more of the major credit reporting bureaus. Using more than half of your available credit on any one card can lower your credit score. However, if you intend to pay your debt down over the course of a year or two, the long term savings could outweigh a short term FICO score dip.