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 fixed3.90%3.84%
15 yr fixed3.10%3.03%
5/1 ARM3.11%3.16%
30 yr refi3.90%3.83%
15 yr refi3.10%3.03%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 20,996.12 232.23 1.12%
Nasdaq 6,025.49 41.67 0.70%
S&P 500 2,388.61 14.46 0.61%
Treasuries 2.33 0.05 2.38%
Data as of 6:17am ET
Company Price Change % Change
Bank of America Corp... 23.98 0.35 1.48%
Freeport-McMoRan Inc... 13.10 0.87 7.11%
Chesapeake Energy Co... 5.51 0.13 2.42%
General Electric Co 29.45 -0.10 -0.34%
AT&T Inc 39.94 -0.08 -0.20%
Data as of Apr 25

Sections

President Trump has done a swift U-turn on Wall Street. In his first 100 days, Trump has shifted away from the populism he campaign on and moved toward Wall Street. More

Among all physicians, females earn an average of 74 cents for every dollar a man makes, according to a new report. More