When credit card debt starts accumulating it can be easy to fall behind on payments. One option people consider is a credit card balance transfer. Balance transfers allow you to roll your credit card debt over into a low, or no, introductory interest rate card so that you can pay it off quicker. However you need to consider what the revert interest rate will be if you don’t pay off your debt during the introductory period.
What is a revert rate?
The revert rate is the interest rate that your balance transfer credit card or some low rate credit cards revert to once the introductory period ends. This rate is usually much higher than the original rate and is the ongoing rate.
Usually the revert rate affects both the purchase rate and the rate for cash withdrawals which is known as cash advance. However the difference is that rates for cash withdrawals are usually higher than the purchase rate and it is calculated as soon as the cash is taken. Interest rates for purchases usually have an interest free period, however this will depend on what type of credit card you have and the financial institution.
It pays to compare interest rates on your credit card because those people who may have switched their credit card debt to a balance transfer card over the past couple of years, and are still using the same card, could be paying more in interest.
If you want to pay off your credit card debt sooner consider applying for a balance transfer credit card. Make sure that you check what the revert rate will be once the introductory period ends before you go ahead.
Or if you want to see what interest rates are being offered for other cards, compare credit cards online or use the credit card balance transfer comparision tool which shows all balance transfer cards currently available on RateCity.