Understanding balance transfers and its benefits

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 » Understanding balance transfers and its benefits

Understanding balance transfers and its benefits

Add to Favorites:
Is it wise to open a new credit card account when you are facing a huge credit card debt? Yes it is, if you are performing this act to pay off the old credit card balance and save a whole lot of money on the interest. How it is done? Simply, by transferring the balance of the old credit card to a new credit card account that charges a lower interest rate. This process of transferring the old credit card debt to a new credit card account is called a balance transfer. If you have the social security number or mail box you can have a credit card balance transfer. Credit card business has grown into enormous proportions and credit card companies are making huge profit out of this boom. Credit card transactions attract a maximum of about 16% annual interest rate. With such a heavy interest rate, it becomes extremely difficult to clear off one’s credit card balance, since the companies keep adding the interest to the principle that multiplies. The credit card companies in order to bring in new customers devised a way to lure them by offering to open a new credit card account with low interest rates for a certain period of time. The harassed consumers not able to manage their existing credit card debts find solace in the new account that allows the transfer of the old debt to the new account. There are two categories of balance transfers available, one with a fixed rate of interest and the other with a limited duration balance transfer. Annual Percentage Rate charged on a fixed balance transfer account does not change for a fixed period of time or until the account holder pays off the entire balance. The limited account allows a very low rate of interest on the account for a limited period of time. For example, 0% interest rate fixed for one year. You can also affect online transfer balance. It is done by indicating your choice for online balance transfer while opening the new credit card account. This mode of transfer is also fast and easy to process. In case your credit limit on the new card is not enough to cover your entire old balance, then you must transfer the credit balance that attracts the highest rate of interest first. You can also consider the option of opening another transfer balance credit card account that will allow you to convert the remaining balance to a 0% interest rate. For a harried consumer, it is a tremendous opportunity to lower the credit card debt burden. With no interest growing on the credit balance, a consumer can pay off his credit card loans with relative ease. When an account reaches the period limit, a customer applying the same method can again open a new account with balance transfer facility. In this way, he/she can pay off all their credit card balances without paying higher interest charges. Also, ensure the closure of your old credit card account when you open a new one. While opening a balance transfer account, make it a point to read all the clauses imposed on the account thoroughly to avoid missing hidden amounts.

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:

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

Posted: June 21, 2017

Whether you are married or not, we all agree that marriage is incredibly important for a person. It signifies the beginning of two people as a team, as a family, of a long commitment. It is a newly born union and the sign of your choice, ... Continue reading
How to Save Money. Best Credit Card Deals and Tips.

How to Save Money. Best Credit Card Deals and Tips.

Posted: June 20, 2017

We all've been through or may find ourselves in such an emergency when money is needed immediately. Lucky you are if you have savings for unexpected expenses. If not, it's never too late to start saving money. There are different ways to ... Continue reading
How the Fed Rate Rise Impacts Credit Cards

How the Fed Rate Rise Impacts Credit Cards

Posted: June 20, 2017

Recently, the Federal Reserve hiked its benchmark rate by a quarter percentage point, as a result, you could see a rise of the interest rates on your credit cards by 0.25%. That was the first hike of the key rate in 2017 and the Fed ... Continue reading