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||3.43%||3.43%|
|15 yr fixed||2.70%||2.69%|
|30 yr refi||3.45%||3.44%|
|15 yr refi||2.74%||2.69%|
Today's featured rates:
HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
A discount on a student loan from Wells Fargo is now yet another perk Amazon offers its Prime customers. More