Do All Balance Transfer Credit Cards Have a 0% APR?

No interest credit cards are a godsend if you’re trying to get out from under credit card debt. They allow you to pay down your balances more aggressively because you have a temporary reprieve from paying interest.

But not all balance transfer credit cards have zero interest. If you think you won’t be able to pay off the balance during the limited-time 0% APR period, it might be better to choose a card with a low ongoing interest rate. Even though you won’t have that no interest interval, you might save more money in the long run.

Keep in mind that there are many good reasons not to open a new card at all. Applying for a credit card results in a hit to your credit score of about five points, and if you’ve already nearly maxed out your existing cards or have a very low score, you may not be able to get approved for a card with good terms. In such cases, moving balances to your existing card with the lowest interest rate might be your best move.

But let’s assume you’re opening a new zero interest credit card and transferring balances from your existing cards. Here’s what to look for:

Transfer fees

It’s usually not free to transfer balances. Although there are a few cards out there without transfer fees, most no interest credit cards charge a percentage of the balance every time you move money onto the card. Look for a card with a low fee of 1 or 2%.

Short-term relief from interest

Zero interest sounds great, but how long will it last? Many 0 APR credit card offers sound great, but the interest holiday expires after only a few months. Look for an offer with an interest free period on the longer side, usually 15 to 18 months.

Super high rates once the low rate expires

The last thing you want is to end up with sky-high rates and be unable to apply for a new balance transfer card when the time comes. Look for a card that has rates below 20% after the no interest period expires. Be aware that most cards have variable rates and the actual rate may be higher when the time comes.

Low annual fees

Credit card companies are businesses too, and if they aren’t charging you interest, they’re looking for other ways to make money. Balance transfer cards with no annual fees do exist, but you may end up paying something. Anything above $100 a year is probably too exorbitant, and you should look elsewhere.

The bottom line is that balance transfer credit cards are a tool to help you get out of debt. They shouldn’t be used to prolong overspending habits. Eventually interest rates are going to kick in, and you’re going to want your balances to be as low as possible when that happens.

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4 Ways for People with No Credit to Start Building a Credit History

An estimated 80 million Americans have little or no credit history, according to Experian, one of three major credit reporting bureaus in the country. For those consumers, receiving a car loan or a mortgage – and even applying for an apartment – can be extremely difficult. Fortunately, there are several effective ways to start building your credit history from scratch. Here’s a look at some of your options.

1. Become an authorized user

Your parents raised you, fed you, and put clothes on your back. Now that you’re older, they can also help you establish your credit history by adding you as an authorized user on one of their credit cards. As an authorized user, you’ll have access to your parent’s full line of credit and perhaps more importantly, your credit score will improve every time a payment is made in full and on time.

2. Get a secured credit card

Secured credit cards serve as an excellent introduction to the world of borrowing. Here’s how it works: You make a deposit to a bank or credit union, which uses this money as collateral in case you miss a payment. The amount of your deposit also serves as your credit limit. Because the financial institution isn’t risking very much in these types of transactions, they are more willing to work with customers without credit histories. Upon closing your account, your deposit will be returned to you.

3. Apply for an unsecured card, but not too often

Obtaining an unsecured credit card doesn’t require you to make a deposit. These types of credit cards also tend to have higher spending limits, which is helpful when you need to make larger purchases. That said, it’s important to be strategic about applying for an unsecured card, as doing so will automatically trigger an inquiry on your credit report, which usually subtracts several points from your credit score.

4. Use your new credit card carefully

Once you’ve obtained a new card, be sure to use it responsibly. After years of using cash or a debit card – which isn’t a loan and thus doesn’t help your credit score – getting into the rhythm of doing so may take some time. Also, be aware that exceeding 30% of your total credit limit could lower your credit score, so try to keep your expenses under that threshold.

From helping you land your dream apartment to locking in the best possible rate on a car loan, a healthy credit score can go a long way. But before you get there, you’ll need to establish a credit history to prove that you’re a reliable borrower. Using these tips can set you in the right direction.

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4 Ways for People with No Credit to Start Building a Credit History

An estimated 80 million Americans have little or no credit history, according to Experian, one of three major credit reporting bureaus in the country. For those consumers, receiving a car loan or a mortgage – and even applying for an apartment – can be extremely difficult. Fortunately, there are several effective ways to start building your credit history from scratch. Here’s a look at some of your options.

1. Become an authorized user

Your parents raised you, fed you, and put clothes on your back. Now that you’re older, they can also help you establish your credit history by adding you as an authorized user on one of their credit cards. As an authorized user, you’ll have access to your parent’s full line of credit and perhaps more importantly, your credit score will improve every time a payment is made in full and on time.

2. Get a secured credit card

Secured credit cards serve as an excellent introduction to the world of borrowing. Here’s how it works: You make a deposit to a bank or credit union, which uses this money as collateral in case you miss a payment. The amount of your deposit also serves as your credit limit. Because the financial institution isn’t risking very much in these types of transactions, they are more willing to work with customers without credit histories. Upon closing your account, your deposit will be returned to you.

3. Apply for an unsecured card, but not too often

Obtaining an unsecured credit card doesn’t require you to make a deposit. These types of credit cards also tend to have higher spending limits, which is helpful when you need to make larger purchases. That said, it’s important to be strategic about applying for an unsecured card, as doing so will automatically trigger an inquiry on your credit report, which usually subtracts several points from your credit score.

4. Use your new credit card carefully

Once you’ve obtained a new card, be sure to use it responsibly. After years of using cash or a debit card – which isn’t a loan and thus doesn’t help your credit score – getting into the rhythm of doing so may take some time. Also, be aware that exceeding 30% of your total credit limit could lower your credit score, so try to keep your expenses under that threshold.

From helping you land your dream apartment to locking in the best possible rate on a car loan, a healthy credit score can go a long way. But before you get there, you’ll need to establish a credit history to prove that you’re a reliable borrower. Using these tips can set you in the right direction.

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Credit card photo via Shutterstock.

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Bad Credit Credit Card Fees: What to Watch Out For

Maybe you had a long period of unemployment. Maybe you had a medical disaster that resulted in a lot of unpaid bills. And maybe it was just plain overspending.

Whatever the reason, you’ve joined the millions of Americans who have credit scores below 630—which means you have bad credit.

Luckily, it’s still possible to get a credit card from a bank that specializes in offering credit cards for people with bad credit.

Choose a card that will rebuild your credit

Steer clear of prepaid debit cards if your goal is to build your credit history. While those are useful financial tools, they don’t actually improve your score.

Secured cards require a deposit

If you have no credit or very low credit, your best bet may be a secured credit card. That means you pay a refundable deposit, which helps the card issuer feel better about taking a chance on you. Of course, you’re looking for a deposit that’s as low as possible. Depending on how bad your credit is, you may be looking at a deposit between $50 and $200.

Look for low annual fees

Annual fees are also a factor. Many credit cards for poor credit charge an annual fee. Some annual fees can go as high as $500—but please don’t be taken in by these credit card offers. Even with a low credit score, you should be able to find a card with a fee below $100.

Good balance transfer cards

If you’re hoping to transfer a balance from one of your existing cards, look for a credit card deal that has a low transfer fee. Most balance transfer credit cards charge a fee based on a percentage of the amount you’re transferring, anywhere between 1% and 5% of the total. If you have tens of thousands of dollars of debt, a 5% balance transfer fee can be quite a chunk of change. Fees below 3% are realistic, although you may find that it’s hard to get a zero interest transfer deal if your credit score is very low.

Don’t focus on rewards cards

There are some rewards credit cards out there for people with poor credit, but they are more likely to come with higher fees. If you can find a decent deal that gives you travel rewards, points, or cash back, go for it. But right now your priority is rebuilding your score—not getting a few airline miles.

Once your score is back in the fair-to-good zone, you can reward yourself by finding a card with extra perks. But for now, focus on finding one with low fees. Pay your bills on time, keep reducing your debt so your balance is a smaller percentage of your overall available credit, and your score will be well on the way to recovery.

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Credit card fee image via Shutterstock.

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Bad Credit Credit Card Fees: What to Watch Out For

Maybe you had a long period of unemployment. Maybe you had a medical disaster that resulted in a lot of unpaid bills. And maybe it was just plain overspending.

Whatever the reason, you’ve joined the millions of Americans who have credit scores below 630—which means you have bad credit.

Luckily, it’s still possible to get a credit card from a bank that specializes in offering credit cards for people with bad credit.

Choose a card that will rebuild your credit

Steer clear of prepaid debit cards if your goal is to build your credit history. While those are useful financial tools, they don’t actually improve your score.

Secured cards require a deposit

If you have no credit or very low credit, your best bet may be a secured credit card. That means you pay a refundable deposit, which helps the card issuer feel better about taking a chance on you. Of course, you’re looking for a deposit that’s as low as possible. Depending on how bad your credit is, you may be looking at a deposit between $50 and $200.

Look for low annual fees

Annual fees are also a factor. Many credit cards for poor credit charge an annual fee. Some annual fees can go as high as $500—but please don’t be taken in by these credit card offers. Even with a low credit score, you should be able to find a card with a fee below $100.

Good balance transfer cards

If you’re hoping to transfer a balance from one of your existing cards, look for a credit card deal that has a low transfer fee. Most balance transfer credit cards charge a fee based on a percentage of the amount you’re transferring, anywhere between 1% and 5% of the total. If you have tens of thousands of dollars of debt, a 5% balance transfer fee can be quite a chunk of change. Fees below 3% are realistic, although you may find that it’s hard to get a zero interest transfer deal if your credit score is very low.

Don’t focus on rewards cards

There are some rewards credit cards out there for people with poor credit, but they are more likely to come with higher fees. If you can find a decent deal that gives you travel rewards, points, or cash back, go for it. But right now your priority is rebuilding your score—not getting a few airline miles.

Once your score is back in the fair-to-good zone, you can reward yourself by finding a card with extra perks. But for now, focus on finding one with low fees. Pay your bills on time, keep reducing your debt so your balance is a smaller percentage of your overall available credit, and your score will be well on the way to recovery.

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Credit card fee image via Shutterstock.

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Can I Get a Bad Credit Credit Card if I Have No Credit?

When it comes to applying for a credit card, having no credit is almost as challenging as having bad credit. Fortunately some of the best credit cards for people with bad credit are also good options for first-time applicants or people with no credit history at all.

Cards for those with bad credit aren’t necessarily a bad deal. It may be hard to find a rewards card, and if you do find one, it probably comes with an annual fee. You’re also unlikely to find a card with rock-bottom interest rates. As an example, the best credit cards for people with no credit history have an interest rate of around 15% — which won’t matter to you unless you carry a balance.

If you can, try to get an unsecured credit card. That means you don’t have to put down a deposit. Secured credit cards that require a refundable deposit (often between $50 and $200) are easier for first-time credit card applicants to qualify for because the deposit gives the card issuer some guarantee that you’ll pay back what you borrow.

Whether you end up with a secured or unsecured card, this is an opportunity to show that you can handle credit, which raises your score and opens the door to better options down the line. The most important thing you can do to raise your score is pay your bill on time, every time. It’s also helpful to use only a small percentage of your total available credit, which can be difficult if you have a very low credit limit when you’re first starting out.

A good rule of thumb: Purchases in any given month should add up to no more than 30% of your credit limit. For example, if you have a $300 credit limit, you can charge up to $100 in each billing cycle without damaging your credit score. If you need to charge more than that, you can pay the balance off early so you always have less than $100 owed on the card.

Over time, on-time payments and carefully controlling the size of your balance in relation to your credit limit will help you establish a strong credit history. You’re only a first-time credit card applicant once. Next time, you’ll be an old hand at this.

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The post Can I Get a Bad Credit Credit Card if I Have No Credit? appeared first on NerdWallet Credit Card Blog.

Source Article http://ift.tt/1y39EC7

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Can I Get a Bad Credit Credit Card if I Have No Credit?

When it comes to applying for a credit card, having no credit is almost as challenging as having bad credit. Fortunately some of the best credit cards for people with bad credit are also good options for first-time applicants or people with no credit history at all.

Cards for those with bad credit aren’t necessarily a bad deal. It may be hard to find a rewards card, and if you do find one, it probably comes with an annual fee. You’re also unlikely to find a card with rock-bottom interest rates. As an example, the best credit cards for people with no credit history have an interest rate of around 15% — which won’t matter to you unless you carry a balance.

If you can, try to get an unsecured credit card. That means you don’t have to put down a deposit. Secured credit cards that require a refundable deposit (often between $50 and $200) are easier for first-time credit card applicants to qualify for because the deposit gives the card issuer some guarantee that you’ll pay back what you borrow.

Whether you end up with a secured or unsecured card, this is an opportunity to show that you can handle credit, which raises your score and opens the door to better options down the line. The most important thing you can do to raise your score is pay your bill on time, every time. It’s also helpful to use only a small percentage of your total available credit, which can be difficult if you have a very low credit limit when you’re first starting out.

A good rule of thumb: Purchases in any given month should add up to no more than 30% of your credit limit. For example, if you have a $300 credit limit, you can charge up to $100 in each billing cycle without damaging your credit score. If you need to charge more than that, you can pay the balance off early so you always have less than $100 owed on the card.

Over time, on-time payments and carefully controlling the size of your balance in relation to your credit limit will help you establish a strong credit history. You’re only a first-time credit card applicant once. Next time, you’ll be an old hand at this.

---

Athletic young man climbing a rope in a gym image via Shutterstock.

The post Can I Get a Bad Credit Credit Card if I Have No Credit? appeared first on NerdWallet Credit Card Blog.

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