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 fixed3.83%3.83%
15 yr fixed2.95%2.95%
5/1 ARM3.12%3.13%
30 yr refi3.94%3.95%
15 yr refi3.05%3.05%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,102.38 -272.38 -1.66%
Nasdaq 4,683.92 -49.58 -1.05%
S&P 500 1,921.22 -29.91 -1.53%
Treasuries 2.13 -0.04 -1.85%
Data as of 2:40am ET
Company Price Change % Change
Bank of America Corp... 15.65 -0.29 -1.82%
Apple Inc 109.27 -1.10 -1.00%
Alcoa Inc 9.49 -0.08 -0.84%
Microsoft Corp 42.61 -0.89 -2.05%
General Electric Co 24.00 -0.51 -2.08%
Data as of Sep 4

Sections

Jessica Alba's Honest Company has been sued by a customer who claims the company is making false claims in its marketing and labeling. More

Harlem's Hot Bread Kitchen teaches kitchen skills to low-income immigrant so they can find employment. More

Google has released Chrome 45, which claims to make your browser faster and give your laptop battery extra life. More

Harlem's Hot Bread Kitchen teaches kitchen skills to low-income immigrant so they can find employment. More

Pimco's famous fund once managed by star manager Bill Gross has less than $100 billion in management for the first time since 2007. More