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.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.22%||4.16%|
|15 yr fixed||3.32%||3.24%|
|30 yr refi||4.21%||4.15%|
|15 yr refi||3.31%||3.24%|
Today's featured rates:
The Federal Reserve is probably not going to raise interest rates until the summer of 2015 at the earliest. More
Attack is not the largest in history but it is bigger than the Target hack of late last year. More
Immigrant entrepreneurs leverage connections abroad to boost international exports -- and non-immigrants could stand to learn from their tactics. More
A 10,000 square-foot home doesn't take care of itself, and many of the uber wealthy families who own them don't want to tend to them either. So they hire people like Bryan Peele. Here are journal entries from a day in his life. More