Top benefits offered by balance transfer credit cards
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many 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 » Top benefits offered by balance transfer credit cards

Top benefits offered by balance transfer credit cards

By
Add to Favorites:
In the simplest terms, a balance transfer is when you can repay the debt on one credit card with another as a result of which your existing balance will be transferred to the new credit card. Although it leads one to question why such a transaction would be necessary, it should be understood that there are several benefits involved. Balance transfer credit cards are offered by card issuers as a marketing strategy to attract customers of other credit cards. As a result, the balance transfer credit card almost always has a friendlier deal than the existing card. Here are some of the benefits of a balance transfer. Introductory rate during the introductory period A majority of the balance transfer cards will offer you a lower introductory rate in the promotional period. Some balance transfer credit cards even offer 0% APR on the balance during the initial period which could be anywhere between 6 months and 18 months or even more, depending on your credit history. If you have a sizeable debt of around $1000 or more and your existing credit card charges in excess of 15% APR, you will save a lot of money in terms of interest paid, by going for a balance transfer. Added credit limit Your credit rating depends on your credit utilization ratio which is the ratio of your credit card debt to your credit limit. If the ratio is lower, then your credit rating would be higher. The new balance transfer credit card, will add to your credit limit without adding to the debt. This will lower your credit utilization and therefore enhance your credit rating. Chance to shift to another card with better terms If you have been tricked into using a credit card with unfavorable terms like higher APR or lower credit limit, the balance transfer will allow you to shift to another credit card, with some added incentives. Moreover, if you keep your old card account alive, you can benefit from the extended credit history as well. Based on your history with the older credit card, you can always expect more rewards, especially if you have developed a good credit rating. The balance transfer will allow you to shift to a card which could offer better rewards that suit you, lower interest rates or higher credit limits. Sometimes credit cards can increase the interest rate on your existing card. As per the new credit card rules you have no obligation to accept the increased interest rate. You can clear the existing debt and move on to another card. Balance transfers will be helpful even in such cases. Added motivation to pay off debt Balance transfers usually come with an introductory period of lower or 0% APR. This provides you added motivation to repay off your debt within the introductory period. Once the promotional period is over, interests will be charged on your principal. Hence, without the interest in the initial period you will have a good idea of how much to pay per month to get rid of the debt.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

5 Reasons to Get the Capital One Venture Miles Rewards Card

By Herbert Moore, Posted: January 18, 2017

If you’re looking for a great travel rewards credit card—one that offers unlimited earning opportunities, flexible redemption, and lots of perks—look no further. This card from Capital One has you covered. Continue reading

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

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

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading