A balance transfer can be defined as a facility, offered by banks and credit companies, which allows customers to shift their balance amounts to another bank or credit card company of their choice. Typically, this transfer can either be made between two similar accounts - such as saving to another savings account; or between two different accounts - savings to fixed deposit account for instance. This is a commonly used facility as there are several advantages of transferring balances. When the shift is complete, the account in the old bank or company is terminated. However, a record of the customer`s dealings is filed. A balance transfer is a complete shift from one financial institution to another. The customer will be expected to follow all the regulations imposed by the new company.
The transferring or credit balances has proved to be a great respite for credit card users who are struggling to contain an ever increasing interest debt. The credit card balance transfer is one of the most customer friendly services offered. Those who utilize this service to its full extent manage to significantly reduce their debt balances. A credit card related transfer or credit allows a credit card user to shift his/her credit balance to a credit card company of choice. Most often, people choose to change over to those outfits that offer lower interest rates and better offers.
It should be mentioned that a company that seemingly offers great deals may not actually be the best option available. This is because a person use of the credit card is highly personalized and therefore specific. What works for one person will not necessarily work for another. Some people choose to constant shift from one company to the next, only staying so long as to enjoy the introductory offers and the lowered interest rates of the grace period. The grace period on this scheme offers further lowered interest rates.
While it may seem like the only beneficiaries are the customers. This is hardly true. Credit card companies use this scheme to encourage customers to join them. Companies compete with each other by offering deals to match up and supersede the ones made by other companies. Through this facility, customers are constantly shifting between companies: this works for the company as there are many petty charges such as introductory charges and annual fees, which are added to the tabs of these passer - by customers.