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When a part of the balance, in the form of money or credit is transferred from one account to another it is referred to as Balance Transfer. These transfers are possible within similar or dissimilar accounts, inclusive of credit card accounts, bank checking accounts, bank savings accounts and trading accounts at financial institutions. For some instances, transfers go together with a small transaction cost to be paid by the consumer.
Let us now talk about balance transfer through credit cards. This implies the movement of money or balance from a credit card account to a new account opened with a different credit card organization. This acts as a way of attracting new customers, by wooing them with attractive incentives like low interest rates or loyalty points. There exists a particular order of payment in which the lowest rate balances are to be paid first. In order to gain complete advantage from the first balance transfer, the customer can ensure nil cash advances and also shun making purchases. There are three main factors that can direct card holders to transfer the credit card balance, namely, normal interest rate transaction fee and teaser rate.
If you are on the outlook of reducing your expenses, you may consider credit card balance transfer. It is better to check the terms and conditions thoroughly, and pick your credit card balance transfer offers before applying for one. Furthermore, scrutinize the details of annual percentage rates (APR) and promotional periods, which are considered the best if it is between 15 to 18 months. Simultaneously, purchases are interest free for the next six months. The best credit card is the one which has a fraud monitoring system, nil annual membership fee and security features comparative to the credit cards available.
In many cases, you are also offered a free online account management and get discounts on travel, gift cards, merchandise and other worthy offers. If your credit ranking supports you, you get a zero percent APR on all balance transfer promotions. It is a better to pay off your interest charges on your balance transfers, so that you can save on the interest costs. Look forward to getting a good sum by making appropriate use of transfer offers on the credit cards. Be sure to read the fine print before opening a new account that offers balance transfer after the expiry of the old credit card. After the money is transferred to the new account, the new company provides a grace period, which is an introductory rate that can last around one year after making a balance transfer.
In case you have a credit card with an interest rate lower than the other cards you have, transfer the balances over to that particular card. When your credit card debt is sky high, think of credit card balance transfer, which is available to any customer with a social security number and a mail box.