The content is accurate at the time of publication and is subject to change.
Credit card balance transfer services offer more than just simple transferring of your funds from one account into another, it also provides a way to reduce the debt you owe to your credit card issuers. If you are the type of consumer who wants to settle your debts as soon as possible, then you could take advantage of this service to help you do the job. This article would explain how the balance transfer service work and how it could help you settle your debts.
The credit card balance transfer service allows you to transfer your funds from your old account into another, and it even allows you to transfer your debts and interest along with your money. The trick here is that if your new account sports a low or 0% interest rate, then you could use that to lower or even nullify the interest rate of your debts. For example, you have debt of $1, 500 in your old account that has a 15% interest rate and then you transfer that into your new account. Then the low or 0% interest rate of your new account would be applied so that your interest rate would be lowered to that prescribed rate although the actual debt amount would still be the same.
This low or 0% interest grace period would last for the next few months (e.g. 3 months, 6 months, a year) after you sign up and complete the balance transfer. During that time, you should be able to sort out your affairs and finances so you could pay off the remaining debt you have in your account. This way, the money that you should be paying off for the interest would then be used to paying off the actual debt amount. If all goes well, you would be able to take out a huge chunk of your debt or even retire the debt itself during that period.
But there is something else you need to be warned about, if ever you are unable to pay off the entire debt amount when the grace period ends then that remaining amount would be increased with the regular interest rate of your new card issuer. And be warned that oftentimes the interest rates of your new card issuer could be just as high as or even higher than that of your old issuers. So if you are unlucky enough to not be able to work out your debts, then you would be stuck with a situation not unlike the one you had before the balance transfer. You should also be warned that any purchases you make during the grace period is not covered under the low or 0% interest rate. So be prepared to have an increased debt to pay if you managed to purchase something using your new card.
For consumers such as yourself who is serious about settling your debts, this is the perfect opportunity for you to do so. Just be sure that you handle the affairs and finances carefully and thoroughly.
