Credit card balance transfers made easy (Poll)

Credit CardsI am sure many of you receive credit card offers in the mail. There are quite a few providers in the US and each of them has to fight over the market share with its peers. The result is — my mailbox gets stuffed every day with offers from Citibank and Chase despite the fact that I already have a credit card from both :-(.

One of the most popular marketing techniques is to offer the potential new client a lucrative balance transfer deal in an attempt to get them on the hook. Many of these offers come with a catch: a balance transfer fee or a high interest rate (after the introductory period if over).

Ziv Yirmiyahu, a co-founder of online credit card directory CreditCardClients, has tipped me on a new tool they launched last week which is supposed to make your life easier in case you do decide to take on one of these offers. Savings Agent is a free online flash application that automates the process of selecting the best credit card deal for your balance transfer related needs.

It takes the fine print of the offers, including multiple interest rates for each offer, balance transfer fees, annual fees and more, and utilizes complex calculations. Together with a debt profile from the user, the Savings Agent uses a database of over two hundred credit card offers to present each consumer with the top 10 credit cards that will save them the most money

You start with filling out information on your current credit card (card type, balance and monthly payments & purchases), then you enter your credit score (if you know it), and at the last step you are presented with the credit card offer that presumably fits your needs the best.

CardWeb, a popular credit card portal, has some interesting stats that are indicative of why a tool like this has a great market potential. Here are results from a few of their polls:

  • Do you pay an interest rate of more than 20% on any of your credit cards?
    Yes 29.72%
    No 68.29%
    Don’t Know 1.97%
  • Did you transfer any credit card balances to lower interest credit cards or other loans in the past six months, and if so, how much did you transfer totally?
    $20,000+ 8.81%
    $10,001-$20,000 12.88%
    $5,000-$10,000 17.89%
    $2,500-$5,000 15.42%
    $1-$2,500 11.21%
    none 33.77%

The important numbers here are “around 66% have taken on a balance transfer offer in an attempt to reduce the interest rate” (balance transfers are popular) and “almost 30% are paying over 20% interest rate” (there is still a potential). CreditCardClients is paid for each converted client and the credit card affiliate market is known for good commission rates.

I gave the Savings Agent a few runs and I really like the design and simplicity of the tool. The only negative comment I have is that I would like for the end result to have better transparency along with more detailed explanation on why the suggested offer saves as much as it does and where it stands compared to other alternatives. I am very much a “do it yourself” type of person and I tend to look skeptically at everything unless I can see how it works.

In any case the tool is certainly worth bookmarking. I personally plan to give it a try when my current 0% balance transfer offer expires. Meanwhile lets run a little poll here to check how ProBargainHunter readers compare to the average American. Do you carry a credit card balance?

See also:

5 Responses to “Credit card balance transfers made easy (Poll)”

  1. 1 edgar Jan 16th, 2007 at 7:32 am

    I was able to receive more information about the card it has selected for me by clicking on the “more savings details” link.
    It will split the savings value into various components.

  2. 2 Yan Jan 17th, 2007 at 3:28 am

    I noticed that link however it would be nice to have a side by side comparison with the next (say) 10 best offers. This would help to understand why the suggested offer is the best and what the alternatives are.

  3. 3 Clever Dude Jan 22nd, 2007 at 8:09 pm

    I’m still amazed that people pay more than 20% on credit cards. Even in college, I never paid more than 17% on a card, and I had $20k in interest when I left.

    I guess it’s easy to do when you miss payments or default on a loan, but I’ll try to make sure that never happens to me. The highest rate on my $80k in non-home debt is 6.5%, and that’s tax deductible student loan interest.

  4. 4 Yan Jan 22nd, 2007 at 9:40 pm

    I am somewhat surprised by the poll results as well. 33% (currently) say they carry a credit card balance. I expected a smaller number. I guess I should do a better job writing about money saving tips. :-)

  1. 1 » 84th Carnival of Personal Finance  on Blueprint for Financial Prosperity Pingback on Jan 22nd, 2007 at 7:26 am

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