By Candice Choi, AP Personal Finance Writer
NEW YORK (AP) — You have $1,000 in holiday debt in one hand. In the other, an offer to move the balance to a credit card with a lower rate. So what's the hold up?
It's not always a cut-and-dry decision because balance transfers can be rigged with surprising terms. To start, the cost for switching could be higher than you expected. And as attractive as an offer seems, it might not be the best deal around.
Before jumping on the first mailing you come across, here are answers to some common questions.
Q: Some credit card companies have hiked balance transfer fees from about 3% to 5% in the past year. How negotiable are those rates?
A: The fees generally aren't negotiable, but you might be able to use the threat of a transferring your balance to get a lower rate on an existing card, said Odysseas Papadimitriou, founder of CardHub.com.
The strategy will likely only work if you have an excellent credit history. So don't expect special favors if you have a record of late payments.You also want to be realistic and specific in your requests. That means asking to knock more than a few percentage points off your rate probably isn't a smart bet if your credit score is just a so-so 650. Of course, it might not be worth negotiating with your old bank if you have a clearly unbeatable offer for a balance transfer from another bank.