From the course: Finance and Accounting Tips

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Low introductory interest rates

Low introductory interest rates

From the course: Finance and Accounting Tips

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Low introductory interest rates

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- I just got an offer from a credit card company to transfer an existing credit card balance from one company to this new company at a low introductory interest rate. The introductory rate is lower than my current interest rate. Why wouldn't I do this? - Well, as the answer to most questions, it depends. It depends on the fee associated with the transfer, it depends on what the interest rate is going to be once this low introductory rate goes away, and it depends on how the new credit card might affect your credit score. - So, let's look at each of these three depends in turn. And let's assume this: you currently have one credit card with a $10,000 limit, a current balance of $4,000, and the annual rate on your current credit card is 12%. - First, is there a fee associated with the balance transfer? Often, you can get a low introductory interest rate for a fee. A common example would be 3% of the amount being transferred. In our credit card example, that fee would be $120 that would…

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