The content is accurate at the time of publication and is subject to change.

A credit card balance transfer is the simple transferring of funds from one of your accounts held by one credit card company into another that is held by a different company. It is a practice and service that is encouraged by the companies and issuers, as it would not only give the clients special incentives and benefits but also get those companies and issues more interest from their clients` use of the brand of cards.

Credit card users usually check on three things before they allow themselves to use the credit card balance transfer service their issuers offer them. These are: the normal interest rate of the credit card, the teaser rate and grace period offered as one of the incentives, and the transaction fee that you need to pay to use the service.

There is a certain benefit that the credit card balance transfer service offers that consumers could take advantage of, and that is the repaying of their debts on their older accounts using the new one they got. Here is an example, you have two accounts, one held by a different credit card issuer, in which you owe a debt to both and with interest. Then, you get a new account from a different company that would give you a 0% interest rate for a limited number of months (ex. the next 12 months). You then transfer the debts from your two older accounts into the new one, combining the total debts while turning the interest rate into 0%.

This benefit could only be accessed for the first few months of acquiring and opening your new account, and it is this benefit that is the main attraction of the credit card balance transfer service. It could even be used to your advantage by switching your debts from one card into another repeatedly to lower the interest rate of your debts, but be warned that there are various limits to this hopping strategy. But still, this benefit would give you the chance to help prevent you from paying extra interest on your credit card debts.

You should also be made aware about the cons of using the credit card balance transfer service. One of which is that this sort of service is not recommended for spendthrifts, because even though there is a 0% interest grace period the consumer would still have to pay the credit card issuer. And you need to be warned that the interest rates of your new credit card company would usually be higher than that of your older ones. So, if you want to use this service, then you have to be the type of consumer who is serious in paying off your debts as soon as possible within the grace period allotted to you.

Another fair warning and advice you need to be aware of is that you should check the fine print of the service contract thoroughly so you would not miss any vital information. Check about the credit card annual fees if there are any, how much are the over-the-limit fees, the annual percentage rate after the grace period, etc.