1. News
  2. /
  3. Business

Dear Penny: I Just Got a Balance Transfer Offer. Is It Too Good to Be True?

Not necessarily. But read the fine print, says the advice columnist.
[Getty Images] [Getty Images]
[Getty Images] [Getty Images]
Published Oct. 28

Dear Penny,

I have three high-interest credit cards, two with near max balances, and I have just been offered a balance transfer from my bank at 1.9% for up to nine months.

However, the bank-speak that accompanied this offer seemed to hide details, such as how the interest changes upon expiry nine months later.

My “too good to be true” flag is up, and I do not want to compound the debt I owe once the offer expires.

Can you shed some light on this practice before I make a bad decision?


Dear R.,

Banks want you to pay attention to that dazzling low APR and ignore all the bank-speak.

Consider that credit card agreements average nearly 5,000 words. They require a reading level about two grades above that of the average American. Banks make a lot of money because most people will focus on the 1.9% introductory APR and ignore the other 5,000 words.

So I applaud your skepticism and urge you to look at any credit card offer through the “is this too good to be true?” lens.

With a balance transfer credit card, you transfer your debt from one or more cards onto a card with a low introductory rate, sometimes zero percent. Lots of people successfully use balance transfer cards to get out of debt faster and save on interest.

But by offering you a balance transfer card, your bank is trying to lure you away from your current card companies. You’re paying a lot of interest to those companies. Your bank wants the pleasure of charging you all that interest, and they’re willing to fight for it. So they give you a temporary low interest offer in hopes that you’ll still have debt when those nine months are up.

To determine whether you want to play this game, you’ll need to be on the lookout for a few things in all that banking mumbo-jumbo.

The first thing to look for is the fees. You’ll typically pay a fee of 3% to 5% of the amount you transfer. That means if the balances you’re transferring total $5,000 and you have a 3% fee, you’re starting with $5,150. Many balance transfer cards charge an annual fee on top of that.

Still, these are typically pretty straightforward. And considering that at the higher end, credit card APRs are often over 20%, you stand to save a lot of money on interest as long as the fees are reasonable.

Where banks really get sneaky is with all the APRs.

That 1.9% rate you mention probably only applies to the transferred balances. There’s probably a way higher APR that applies to any new purchases you charge to the card.

Also look for the regular APR, i.e., the interest you’ll be charged once those nine months are over. Many people find that the regular APR on their balance transfer card is a couple points higher than the APRs on their existing cards.

Many agreements also state that the bank can cancel your promotional APR if you make late payments or miss them altogether.

Because of all the baiting and switching surrounding APRs, I suggest pursuing a balance transfer card only if you can budget enough each month to wipe out your debt completely during the promo period. You also need to solemnly swear that you will not make additional purchases on this card.

If you do decide to go this route, I recommend shopping around before you take up this offer. Nine months is a relatively short promo period — many cards offer between 12 and 21 months, and a longer low-interest period gives you more breathing room to nix this debt. Bonus points if you can qualify for a zero-interest promotion.

But if you know that you won’t be able to pay off your debt during the introductory period, a debt consolidation loan may be a better option. Sure, you’ll pay more than 1.9% interest, but you’ll get the simplicity of a fixed monthly payment and you won’t have to juggle multiple APRs.

Just remember that banks make a lot of money because people don’t know what they’re signing up for. Don’t be one of those people. Approach future credit cards and loans with the same scrutiny you’re bringing to this offer, and you’ll do just fine.

Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Send your questions about credit cards to


  1. Frontier Communications this week launched tools to combat robocalls better. Pictured is a Frontier flag flies outside Frontier's regional office in Tampa in 2015. [Times file photo]
    The internet, phone and cable provider will help its customers better identify spam and fraudulent calls.
  2. Tampa Electric Co. customers will see a reduction in their rate for next year. Pictured is the utility's headquarters in Tampa in 2017. | [Chris Urso | Times (2017)] [URSO, CHRIS  |  Tampa Bay Times]
    The reduction comes because of a drop in Florida’s corporate tax rate.
  3. California-based customer service company Alorica is permanently closing its call center near U.S. 301 and Adamo Drive and laying off 482 employees. [Google street view]
    The layoffs are scheduled to take place from Feb. 9 through March 27.
  4. Check for the latest breaking news in the Tampa Bay area.
    The company already has offices in Boston, San Francisco and Seattle, but likes the Tampa Bay area’s pool of tech talent.
  5. Brett Griest, 61, and his wife, Shannon, are the proprietors of the East Main Street Coffee Shop & Sandwich Shop in New Port Richey. The coffee, specialty sandwiches and a neighborly feel keep customers coming back. [Michele Miller]
    Three years in, the East Main Street Coffee and Sandwich Shop is making a go of it.
  6. Tampa Bay Lightning owner Jeff Vinik has invested $3 million in Bridge Connector, a Nashville-based medical technology company.
    Bridge Connector already had ties to Tampa. Its founder graduated from the University of South Florida.
  7. An administrative judge previously said a Pasco County ordinance allowing solar farms in agricultural districts did not violate the county's comprehensive land-use plan. On Tuesday, the county rejected a settlement offer from the litigants who challenged the planned solar farm. [Times]
    Two residents proposed a $165,000 payment to end litigation over a planned solar farm in Blanton.
  8. Robert Matthews Beall III, who goes by Matt Beall, is Beall's, Inc.'s new CEO. His great grandfather founded the company in 1915. [Beall's]
    Beall takes over leadership from the chain’s first non-family CEO.
  9. An artist's rendering of the planned Encompass Health Corp.'s regional office in the Bexley by Newland Communities in Land O' Lakes. [Pasco Economic Development Council]
    The company receives a $983,000 incentive package for the relocation
  10. Rooker Properties of Atlanta plans to build at least 400,000 square feet of industrial and office space at what is now county-owned land on Old Pasco Road, Wesley Chapel. Pictured is Rooker's Spartan Ridge Logistics Center, a 273,000-square-foot, Class-A industrial building in Spartanburg, S.C. It was constructed in 2018, and the company said the buildings planned for the Pasco County site will closely resemble this. [Rooker Properties]
    The inventive package includes a $3.7 million forgivable loan to Rooker Properties.