How Many Balance Transfer Credit Cards Do You Need

As editor of Smart Balance Transfers, I field a substantial amount of questions (and complaints) about credit card companies. One of the most common questions is this: what will my credit limit be? Unfortunately, this is one question I cannot answer, as credit card companies use a number of factors to determine credit limits, none of which are made public.

Prior to the credit crunch, credit card companies regularly provided new applicants with generous credit limits of $5,000, $10,000 and even $25,000. Today, some credit card companies grant credit limits as low as $500 for applicants who just manage to qualify for approval.

Because you will not know your credit limit until your card arrives in the mail, applying for two credit cards is a good way of gaining access to a higher credit line. However, this is not the only one reason why applying for two credit cards can be significantly more beneficial than simply applying for one.

Reason #1 – Long term interest rates: When you apply for a 0% APR balance transfer credit card online, through the mail, or on the phone, all you know about the “go-to” or long term interest rate is that it can be as low as, say, 11.99% or as high as 19.99%. What you will not know is the actual interest rate you will be charged once your 0% period expires. This information, along with your credit limit, is determined during the processing of your application. Consequently, you will not know what your long term interest rate or credit limit will be until your card arrives in the mail. You may get a large credit limit, but a much higher long term interest rate than you are willing to accept. Or vice versa. Or neither.

However, what you won’t know is whether or not you got the best deal, as you will be unable to compare the card that arrives in the mail with another offer unless you go back, apply again, and wait for the second card to arrive.

Reason #2 – How Long is Your 0% Rate: Although the new credit card laws have restricted some of the worst credit card practices, a number of dirty tricks still remain. One is advertising 0% rates for up to 1 year. Many companies that advertise 0% rates for up to 1 year may only grant you a 0% period for as little as six months, based on a review of your application. Unfortunately, this is another rather important detail you will not know until your card arrives in the mail.

Given the fact you will not know your credit limit, long term interest rate, or even the length of your 0% rate with some companies, applying for two balance transfer credit cards is a viable and effective way of making sure you get the best deal possible.

On Smart Balance Transfers, I recommend the best overall deals to help visitors of my site save the most money. However, in order to truly compare credit cards and get the best possible deal, you should apply for two credit cards and compare the long term interest rate and the length of the 0% period you ultimately receive to insure you activate the credit card that provides you the best opportunity to save money.

For detailed information on current offers, please see the 0% APR balance transfer section of Smart Balance Transfers where you can compare current offers and apply online.