Top benefits offered by balance transfer credit cards


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 » Top benefits offered by balance transfer credit cards

Top benefits offered by balance transfer credit cards

Updated: September 28, 2018

The content is accurate at the time of publication and is subject to change.
In the simplest terms, a balance transfer is when you can repay the debt on one credit card with another as a result of which your existing balance will be transferred to the new credit card. Although it leads one to question why such a transaction would be necessary, it should be understood that there are several benefits involved. Balance transfer credit cards are offered by card issuers as a marketing strategy to attract customers of other credit cards. As a result, the balance transfer credit card almost always has a friendlier deal than the existing card. Here are some of the benefits of a balance transfer. Introductory rate during the introductory period A majority of the balance transfer cards will offer you a lower introductory rate in the promotional period. Some balance transfer credit cards even offer 0% APR on the balance during the initial period which could be anywhere between 6 months and 18 months or even more, depending on your credit history. If you have a sizeable debt of around $1000 or more and your existing credit card charges in excess of 15% APR, you will save a lot of money in terms of interest paid, by going for a balance transfer. Added credit limit Your credit rating depends on your credit utilization ratio which is the ratio of your credit card debt to your credit limit. If the ratio is lower, then your credit rating would be higher. The new balance transfer credit card, will add to your credit limit without adding to the debt. This will lower your credit utilization and therefore enhance your credit rating. Chance to shift to another card with better terms If you have been tricked into using a credit card with unfavorable terms like higher APR or lower credit limit, the balance transfer will allow you to shift to another credit card, with some added incentives. Moreover, if you keep your old card account alive, you can benefit from the extended credit history as well. Based on your history with the older credit card, you can always expect more rewards, especially if you have developed a good credit rating. The balance transfer will allow you to shift to a card which could offer better rewards that suit you, lower interest rates or higher credit limits. Sometimes credit cards can increase the interest rate on your existing card. As per the new credit card rules you have no obligation to accept the increased interest rate. You can clear the existing debt and move on to another card. Balance transfers will be helpful even in such cases. Added motivation to pay off debt Balance transfers usually come with an introductory period of lower or 0% APR. This provides you added motivation to repay off your debt within the introductory period. Once the promotional period is over, interests will be charged on your principal. Hence, without the interest in the initial period you will have a good idea of how much to pay per month to get rid of the debt.

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!