Knowing What You Should Know about Balance Transfers


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most 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. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » Knowing What You Should Know about Balance Transfers

Knowing What You Should Know about Balance Transfers

The content is accurate at the time of publication and is subject to change.
Balance transfer is a miracle for those who have mounting credit card debt. Using a new credit account to settle previous credit card debts sound silly however for most Americans who experiences troubles of such nature. Opening a new account for credit card balances transfer makes sense and can be of great help to save a lot of money. But how does this balance transfer work? In times when you cannot pay your debt to your first credit card company resorting to another credit card company to pay for that owed amount can possibly be your way out of that debt problem. For instance, you owe Company X the amount of $5000 and let`s say you also owe Company Y with $2000. You cannot pay these two companies anymore and you decided to transfer your debt to Company Z. Company Z offers a 0% interest rate for 12 months in balance transfer cases. Company Z will pay Company X $5000 and Company Y with $2000 making you free of any debt from the two companies however the owed amount did not disappear for balance transfer is no magic. After the transfer has completed, you now owe company Z $7000 at 0%. Credit card is a big business today thus several different companies come up with services such as balance transfer at 3% or lower interest rate to allure customers. This can be both a good and a bad thing for consumers. Good because if the competition of credit card issuers is stiff then choice of products and services abound and customers can pick from a lot of choices. However this can also post threat for consumers since sugar-coated offers can become so irresistible at first but will end up a disaster if insufficient knowledge was use to decide. Balance transfer at 3% or even 0% interest rate is common nowadays. Low right? Usually low rates are offered to get customers but these things mostly are baits which later on leave consumers with no way out, paying high interest rates and having more debts. So what should one do then? Balance transfer is not at all a bad thing. It is true that this can be a saving grace if coupled with careful assessment of these offers. First thing to keep in mind is that balance transfers offer promotional interest rates. It is promotional and promotions end so you have to be wise enough to ask when the promo ends. Another thing you must know is the promo interest rates and the actual interest rate after the promo period. Since credit card companies increase rates substantially, so to avoid being surprised by paying more that you are expecting, it is good to ask and know things before hand. In transferring a balance most companies charge fees to complete the transfer thus it is good to know if your prospect new credit card company will charge you and by how much. The smaller the fee to pay, the better it is for you.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
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:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!