Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Pros and cons of a new credit card

By Susie Poppick, Money magazine


NEW YORK (Money magazine) -- Question: I have a $7,000 balance on a credit card with a 10% rate. I've been offered a new card that charges 0% on balance transfers for a year, then up to 16%. I'd pay a 3% transaction fee. Is this a good deal? -- Cyndi McAdams, Fort Mojave, Ariz.

Answer: In general, a balance transfer makes sense only if you can pay off the card within the promotional period.

In your case, even after paying the 3% fee, you'd save about $490 the first year.

But card offers usually play up the terms for someone with near-perfect credit, says Ben Woolsey of CreditCards.com, and you don't know the interest rate you'll ultimately qualify for and whether it will stay the same over time.

If you can't pay off your balance within the year, don't switch unless the card offers other great benefits, such as a generous rewards program.

Test how much you could save based on various factors with the balance transfer calculator at CreditCards.com.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.67%3.76%
15 yr fixed2.79%2.83%
5/1 ARM3.07%3.10%
30 yr refi3.67%3.76%
15 yr refi2.82%2.83%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,027.05 -177.92 -1.10%
Nasdaq 4,283.75 -79.39 -1.82%
S&P 500 1,853.44 -26.61 -1.42%
Treasuries 1.74 -0.11 -6.11%
Data as of 10:41pm ET
Company Price Change % Change
Bank of America Corp... 12.27 -0.68 -5.25%
Chesapeake Energy Co... 2.04 -1.02 -33.33%
Facebook Inc 99.75 -4.32 -4.15%
Freeport-McMoRan Inc... 5.27 -0.41 -7.22%
Williams Companies I... 11.16 -5.96 -34.81%
Data as of 4:15pm ET

Sections

A former deputy secretary in Obama's Department of Education will take over the University of Phoenix's parent company, Apollo Education Group, once the sale is finalized. More

Yelp announced another loss Monday afternoon as its sales growth slows. The company also said its CFO is stepping down. More

Zenefits founder and CEO Parker Conrad steps down. COO David Sacks takes over, with a call to fix compliance issues and change the company's culture. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

A former deputy secretary in Obama's Department of Education will take over the University of Phoenix's parent company, Apollo Education Group, once the sale is finalized. More