Things to know about credit card 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 » Things to know about credit card balance transfers

Things to know about credit card balance transfers

The content is accurate at the time of publication and is subject to change.
Balance transfers are one of the easiest escape routes out of credit card debt if you ever find yourself in the unenviable position of being in it. But you can do this only if you find the right credit card to do this. There are a number of credit accounts offered by numerous banks and it is going to be very difficult for you to discover the right one if you do not know the basics about balance transfers before going ahead with it. The first step is to choose the right card. The entire concept of balance transfer is based on the premise that you are going to choose the right card. You must make sure that the interest rate on the card is lesser than that on your current card. There are a lot of banks that offer cards which have a low interest rate for an initial period and then revert to the standard APR. Make sure that the reduced interest rate is for a substantial period of time. Sometimes the banks will ask for admin fees or balance transfer costs. In such cases, it will not be worth your while to make the transfer to such an account. If you are lucky, you can get a credit account with an interest free holiday period. In such cases, you do not have to pay interest on any amount borrowed during a certain initial period which can range between six months to a year in some cases. It is very rare to land such a deal, but if you do make sure that you grab it with arms wide open. Then the other thing to keep in mind is the impact that the balance transfer is going to have on your account. It is not good to keep doing it over and over again. This can adversely impact your credit score. But if you do it just once, it can in fact increase your credit score. This is because your debt to credit ratio will decrease. Make sure that you always use only less than thirty percent of your credit limit. If you use more than this, you run the risk of being branded as a compulsive borrower. You don`t want the banks to feel this way if you hope to do business with them in the future. The process of the balance transfer is not complete until all the outstanding balance is transferred to the new account and the old bank acknowledges the same. It has often been the case that the old credit account will still show the outstanding balance while even the new credit account will show the balance. In such cases, you will end up paying interest on two outstanding balance amounts even though you just owe one bank. This can be very detrimental to your all important credit score if you do not discover it in time and address the problem deliberately and in time.

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!