Credit cards are payment cards that allow you to borrow funds from your issuer. They operate like debit cards; only that debit cards allow you to spend money in your checking account. There are two main kinds of credit cards. We have secured and unsecured ones. Secured credit cards are the ones that require you to make a security deposit, while unsecured ones require a borrowing history. I will major in the best balance transfer credit cards for fair credit.
Among the various disadvantages of a credit card is that you can get money when you have nothing left in your pockets. The cards allow you to borrow in a revolving manner in that once you repay your debt after the end of every month, you can borrow again. Your limit increases when you repay on time and use your card correctly. That means repaying your debts early in advance, utilizing your credit limit to at most 30%, among other practices.
It is interesting to note that not only adults can apply for credit cards, but even children can. However, when applying for one, they must be accompanied by their parents or guardians. Those are the people that should act as guarantors and are responsible for the card usage. We all know that children can do the unthinkable if not closely watched.
What is the difference between a secured and unsecured credit card?
I have mentioned one difference: the secured ones only require a security deposit, while unsecured ones require scores. An additional difference between secured and unsecured credit cards is that you can set your limit with a secured card depending on the amount you pay as security. For unsecured credit cards, your scores dictate your limits.
Additionally, secured credit cards do not make hard inquiries about your scores, while unsecured ones ensure that you qualify for a given card. Moreover, secured credit cards attract low APR while unsecured ones for bad credit attract high APR.
How to get a credit card?
Getting a credit card is not stressful, especially when applying for secured ones. You only need to research online on the websites of various issuers and see who has the best offers. Most issuers do so online, and thus there is no need to worry about traveling to far places to get your card.
When applying for a secured credit card, you only need to visit the bank or credit union issuer’s site, navigate to cards and choose the one you want. After that, you can fill in your details within a few minutes, whereby you must give your location for the card to be sent to your place. There are numerous secured credit cards for rebuilding credit, and getting one should not be an issue anyway.
Some secured credit cards need you to pay for the card and activate it online before getting the actual one. You then get the card’s details, such as the card number, the expiration date, and the CVV, so that you can use your card for online purchases. Once you get the card, you can use it for online and physical store purchases.
On the other hand, secured ones require a borrowing history. That means you must have taken a loan or a line of credit at one time, and your details are with the credit bureaus. Issuers usually contact hard inquiries to see if you qualify for the card and so on. They check the scores to determine which card they can give you. We have credit cards for bad scores and others for good ones.
It is also vital to understand that you can apply for an unsecured credit card online and receive it at your place. Again, secured and unsecured ones allow you to apply at a physical branch. The good thing about secured cards is that you can get approved for a credit card with no credit at all.
What is a credit score?
A credit score is the creditworthiness of an individual. In simple terms, it shows the capability of an individual to pay a particular loan. The scores range from 300-850, whereby 300 represents the worst scores and 850 represents excellent scores. When you have poor scores, you can find a card that suits your needs. Bad credit cards have lower limits and attract high-interest rates because of the risks involved. Remember that you have a low chance of repaying a loan when you have bad credit scores.
Credit bureaus calculate credit scores. We have three main credit bureaus in the U.S. We have Experian, Equifax, and TransUnion. All loans and credit card issuers must report your repayment pattern and other necessary details to all the three bureaus, which in turn use the given information to calculate scores and credit reports. You need to understand there is a difference between scores and reports.
What are balance transfer credit cards?
The name may make the cards appear as if they are complex, but that is not the case. The cards are the ones that allow you to migrate from another card and enjoy better terms such as lower interest rates and higher borrowing limits. Most balance transfer cards offer a 0% introductory APR for a given period, usually from a few months to around two years. During that time, you can repay your debt without any interest.
Balance transfer credit cards usually repay the debts of your current card, then transfer the debt to the new card so that you can repay easily. Their main aim is to add more customers to their side since they know that once the 0% APR period is over, you will borrow money and return with interest, thus giving them returns.
Which are the best balance transfer credit cards for fair credit?
There are various credit cards that you can get to transfer your balance. They include the following.
i) Navy Federal Credit Union Platinum Credit Card
The card has an annual fee of $0. Therefore, you do not need to stress yourself with fees whatsoever. The introductory balance transfer offer is 0% APR on balance transfers for 12 months. After that, you will enjoy the low, ongoing variable APR of 5.99% – 18.00%.
Additionally, there are no balance transfer fees, making the card more super to use. However, you must be a union member to apply. If you belong to the army or have an immediate family member in the union, you can apply for an account. And because Navy Federal is a credit union, you should be a member to apply for the card.
ii) Bank of America® Customized Cash Rewards
The card gives you a welcome bonus of $200 as a way of attracting more customers to their side. The card does not need any annual fees whatsoever. You can therefore be sure to save a lot on that. It has a 13.99% – 23.99% variable APR on purchases and balance transfers.
iii) Wells Fargo Reflect℠ Card
The card has a 0% intro APR for 21 months from when you open your account as long as you qualify for the balance transfers. It has no annual fees at all, and once you get the card, you can be sure to save substantial amounts of money.
iv) U.S. Bank Visa® Platinum Card
The card gives you a 0% Purchase intro APR for 20 billing cycles on balance transfers. The regular APR is 14.49% – 24.49% (variable). However, there are no rewards yet. We have seen that a card like Bank of America® Customized Cash Rewards gives you a $200 bonus when you open your account. That is not the case with U.S. Bank Visa® Platinum Card.
v) BankAmericard® credit card
The card gives you a 0% Intro APR for 18 months for any B.T.s made within the first 60 days. When carrying out a balance transfer, you must part with a 3% fee (min. $10). The Regular APR is 12.99% – 22.99%, variable on purchases and balance transfers. The card has no rewards whatsoever.
vi) Discover it® Balance Transfer
You can get a 0% Balance transfer intro APR for 18 months. Again, you will get a 0% Purchase intro APR for six months. The Regular APR is 11.99% – 22.99%, which is Variable. Moreover, the Discover it® Balance Transfer card gives you a reward rate of 1%–5% when you make purchases with the card.
vii) Citi® Diamond Preferred® Card
You can get a 0% intro APR for 21 months on your balance transfers. The Regular APR lies between 13.74% – 23.74%, variable. Unfortunately, the card has no rewards, but it is a good option to transfer your balances.
A credit card allows one to borrow funds from their issuer, who can be a bank or a credit union. We have secured and unsecured cards, whereby a secured one requires a security deposit while the unsecured one requires credit scores.
Balance transfer credit cards allow one to move their balance from the existing card to benefit from various goodies such as 0% APR for several months, higher limits, and low Variable APR after the balance transfer period.