Balance Transfer Credit Card Application Tips

In the not so distant past, applying for balance transfer credit cards online was a quick and simple process. In less than ten minutes, an applicant could apply online, initiate 0% balance transfers and learn of their approval status and credit line. Recent changes in the credit card market have altered the way consumers should approach the credit card application process. Here are some Smart Balance Transfer tips to help you avoid credit card headaches:

1. Do Not Transfer Balances Online: If you only choose to read two of our tips, read this one twice. Why? First, many credit card companies are offering multiple 0% interest rate periods. These credit cards advertise a 0% APR for up to 1 year, but may approve your application and only grant you a 0% rate for as little as three months. Of equal importance to the 0% introductory term is the long term interest rates. Nearly all credit card companies offer multiple interest rates, but advertise the lowest rate. Thus, you may think you are applying for a credit card with a 0% APR for 1 year and a 10.99% APR, only to open your mailbox and find that you have a 0% APR for 3 months and a 17.99% APR. Consequently, it truly pays to apply online and transfer balances offline.
2. Consider Applying for Multiple Balance Transfer Credit Cards: A year ago, credit card companies offered generous credit limits. Such is not the case today. So, while you may be used to getting $10,000 or $25,000 credit limits, today's initial credit limits may be closer to $5,000 if not significantly lower. Consequently, if you are looking to transfer $8,000 in high interest credit card balances, you will likely need more than one 0% credit card to complete the transaction.
3. Consider the Credit Card Company, Not Just the 0% Balance Transfer Offer: During the credit card boom years, it didn't really matter whose credit card was in your wallet. After all, most people could get new cards with ease. Today, however, you may be stuck with the company you transfer your balances to for more than a year. Because of this, it is best to stick with companies that have not been sticking it to their customers. Lately, only two major credit card companies fall into this category, Discover Card and Citibank. Here's why:
1. Discover: Discover Card hasn't been in the news and has generated no credit card complaints on our blog (this is no small accomplishment). While this may change in the future, Discover has always been a consumer friendly company and, because they are not issuers of MasterCard or Visa cards, they have to work harder to protect their brand during this credit crisis.
2. Citibank: Yes, Citibank. Despite all the negative things you may be reading about the company, their credit card division has generated no credit card complaints in the past few months. They appear to be adopting the new credit card laws in advance of the other big banks, and their credit card applications clearly state that they will not raise your interest rate until you card expires unless you fail to make a timely payment.
4. Provide Accurate Financial Information on Your Application: This is both a moral and a practical issue. The moral issue is self explanatory. The practical issue may surprise you. In the past, very little "fact checking" was done on credit card applications. Today, there is an increasing chance you may be asked to provide proof of income, such as a pay stub. Getting caught in a lie will not help the approval process. So be prepared to support the information you provide. Also, don't forget to include these sources of income:
   1. Child support and alimony
   2. Investment income, including interest and dividends
5. Don't Transfer Balances Online: Okay, I said it again. But this is for an entirely different reason. Apart from the dangers of transferring balances online, there is also a possibility that listing your current balances on your credit card application may negatively impact your chances of getting approved. Now, credit card companies will essentially know how much debt you have when they review your credit report. However, the very fact that you intend to use their credit card for balance transfers may be considered a negative factor. So, out of an abundance of caution, don't transfer balances online.

As you can see, the world of balance transfer credit card applications is not as simple as it was a year ago. In fact, the very future of 0% balance transfers is rather shaky right now. Many credit card companies are reducing the length of 0% offers, if not ending them altogether. Because of this, it is extremely important to lock in a 0% rate on balance transfers as soon as possible. And if you remember just one thing, apply online, but transfer balances offline. For more information, see our article on how to do a credit card balance transfer.

If you're ready to apply, you can compare balance transfer credit card applications on our website.

Last Update: 23 September 2009