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||3.97%||4.04%|
|15 yr fixed||3.15%||3.20%|
|30 yr refi||3.99%||4.08%|
|15 yr refi||3.17%||3.23%|
Today's featured rates:
Ikea has renamed some of its best selling products after the most googled relationship questions. More
Trump says he sold all his stocks in June. But what about his hedge funds? He was (and may still be) invested in three run by John Paulson, a major campaign donor. More
Apple is investing in businesses run by China's largest wind-turbine maker -- but the move isn't part of any plan to build wind-powered gadgets. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More