Make the most of your money by opting for balance transfers

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » Make the most of your money by opting for balance transfers

Make the most of your money by opting for balance transfers

Balance transfer is a financial benefit that all financial institutes and banks offer to attract customers. The basic principle is that when a person takes a loan from a bank he makes an assurance to repay the balances on time, along with a certain amount of interest that the bank might charge on the loan amount. This interest rate varies from banks to banks. In order to attract new customers the banks offer a scheme in which a borrower can transfer their balance amount that would not cost customers, an arm and a leg. Banks use the "interest free balance transfer" ploy, to rake in new customers. In this way, the customer gets to save money from paying interests and the bank earns a new customer. How does balance transfer work? When the customer signs up for the interest free transfer, there is no interest levied on the amount that has been transferred till the promotional period expires. For example, if the balance transfer of a customer has been made the promotional rate for six months, then the customer is not entitled to pay interest on that amount for the next six months. Once the promotional offer ends, the regular balance transfer interest rate will be charged on the remaining loan amount. The consumer may have to sacrifice the promotional offer if he/she makes a late payment, has a payment returned or gets their cheque bounced or exceeds the available credit limit during the promotional offer. In such a case the 0 percent offer is rolled back, and the normal APR gets applied to the outstanding balance. This default rate will be much higher than the normal interest rate and will cause the original amount to increase due to the interest rate. The other case when one may not acquire a full benefit from the promotional offer of  0% balance transfer  is when the customer transfers the balance that to a credit card account that already has a balance or makes over the limit  purchases on the  credit card. This will call for above-minimum payments that will get applied to the credit card balance and will incur the highest interest rate. So a customer can benefit from the introductory offer of 0% balance transfer only when he is able to pay back the loan amount within the grace period granted for 0 on balance transfer. In this way, the user can dodge past paying interest rates on the balance transfer. Secondly make sure that the customer avoids making any further purchases on the credit card until the balance transfer gets completely repaid. Points to be careful of While it is true that balance transfers can make life simpler in terms of finances, it is important to choose the right card to get expected results. Ensure you consider all the critical factors that impact your debt, and make a well informed choice.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Credit Card Tips For Holiday Shopping 2017

Credit Card Tips For Holiday Shopping 2017

Posted: November 27, 2017

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading
How to Earn on Black Friday Deals in 2017

How to Earn on Black Friday Deals in 2017

Posted: November 23, 2017

Black Friday is around the corner! Ready, steady, go! But before you go on a shopping spree to catch the jaw-dropping deals and discounts, make sure you maximize them. Did you know that you can not only save on Black Friday, but also earn? ... Continue reading
Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 20, 2017

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading