Understanding balance transfers and its benefits


Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com 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. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » Understanding balance transfers and its benefits

Understanding balance transfers and its benefits

The content is accurate at the time of publication and is subject to change.
Is it wise to open a new credit card account when you are facing a huge credit card debt? Yes it is, if you are performing this act to pay off the old credit card balance and save a whole lot of money on the interest. How it is done? Simply, by transferring the balance of the old credit card to a new credit card account that charges a lower interest rate. This process of transferring the old credit card debt to a new credit card account is called a balance transfer. If you have the social security number or mail box you can have a credit card balance transfer. Credit card business has grown into enormous proportions and credit card companies are making huge profit out of this boom. Credit card transactions attract a maximum of about 16% annual interest rate. With such a heavy interest rate, it becomes extremely difficult to clear off one’s credit card balance, since the companies keep adding the interest to the principle that multiplies. The credit card companies in order to bring in new customers devised a way to lure them by offering to open a new credit card account with low interest rates for a certain period of time. The harassed consumers not able to manage their existing credit card debts find solace in the new account that allows the transfer of the old debt to the new account. There are two categories of balance transfers available, one with a fixed rate of interest and the other with a limited duration balance transfer. Annual Percentage Rate charged on a fixed balance transfer account does not change for a fixed period of time or until the account holder pays off the entire balance. The limited account allows a very low rate of interest on the account for a limited period of time. For example, 0% interest rate fixed for one year. You can also affect online transfer balance. It is done by indicating your choice for online balance transfer while opening the new credit card account. This mode of transfer is also fast and easy to process. In case your credit limit on the new card is not enough to cover your entire old balance, then you must transfer the credit balance that attracts the highest rate of interest first. You can also consider the option of opening another transfer balance credit card account that will allow you to convert the remaining balance to a 0% interest rate. For a harried consumer, it is a tremendous opportunity to lower the credit card debt burden. With no interest growing on the credit balance, a consumer can pay off his credit card loans with relative ease. When an account reaches the period limit, a customer applying the same method can again open a new account with balance transfer facility. In this way, he/she can pay off all their credit card balances without paying higher interest charges. Also, ensure the closure of your old credit card account when you open a new one. While opening a balance transfer account, make it a point to read all the clauses imposed on the account thoroughly to avoid missing hidden amounts.

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:

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

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

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... 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!