Transferring balances from one credit card to another is known as balance transfer and this is done when there are dues or outstanding balances on the existing card. Balance transfers are normally done from high APR cards to 0% APR cards. There are a number of banks that offer these zero balance transfers from the existing cards to the new ones. In other instances, balance transfers will involve transferring of funds from bank loan accounts to the card for a fixed time period. These loans will typically have either 0% interest rates or low interest rates on them.
All of us wish to have a card that has 0% APR or a low interest rate. So, even if you have a card with high APRs you can still get rid of it by doing a balance transfer. There is a lot of competition in the credit card industry and the card issuers do all they can to attract customers. Hence, these card companies make tempting balance transfer offers. Some balance transfers may have no interest or 0% APR balance transfers. They may even offer ‘credit balance transfer rewards.’
Sometimes, racking up huge balances on your card can lead to a huge credit card debt. But at other times even those who are regular in making payments may end up with huge outstanding balances on their credit cards. During such times, transferring the balances onto a fresh card that carries no interest for a stipulated time period is the only option to get out of the mess. But it is important to ensure that you have at least paid up the minimum due on the card before doing a balance transfer. This is something that can be done once in a while but it should not become a habit. Once you do the balance transfer and clear off the balances, you must ensure that you are up-to-date on all the fresh payments you have to make in the future.
Rebuilding your credit history is important. After you have done that you would have created an atmosphere of trust with the card issuers. Then you can apply for 0% APR or no-interest balance transfer. This offer will typically last for about a year but there are cards that give these offers for 18 months. If you maintain a good record you can also avail the credit balance transfer rewards after closing the account before the end of the zero-interest period.