Guide to Balance Transfer Credit Cards

Credit Card Articles > Guide to Balance Transfer Credit Cards

by: BestCreditCardRatings Staff

Today is the age of plastic money where majority of the people around the world (especially in developed countries) pay their money through credit cards. Applying for a credit card is often done by people so that they can get rid of the mounting debt for a while. Also carrying a credit card offers the convenience of roaming and shopping anywhere without carrying money. Did you know that using your credit card can help you in saving a considerable amount of money as well? You can save money through credit cards with the help of credit card balance transfer technique which you can easily apply for in case you have a mailbox and a social security number.

Credit card companies today make a lot of money from the interest that they charge their customers. Many credit card companies also make a lot of money from service charges. In fact, the average APR of majority of the credit cards is 16%. The credit card companies have come out with a novel method for you to save some money by introducing the balance transfer feature.

The balance transfer feature is introduced by credit card companies to lure customers to apply for the credit cards. With this feature you can avail of free balance transfers from your old credit cards. Hence when the balance from the old card is transferred to the new card a grace period will be offered by the credit card company wherein you will have to pay a charge that is far lesser than the transferred balance. This introductory rate of 0% or 1% or 2% is offered normally for a period of 6 months to a year after which the balance transfer is done.

Hence balance transfers are one of the most sought after techniques by savvy customers who would like to pay less interest charges. A customer can simply open a new account to get his old card balance transferred. Afterwards he can get the balance transferred to his new card so that the new grace period begins which offers you zero or low finance charges. Remember to close all your old card accounts when you do a balance transfer as your credit score will go for a toss if you have more than two credit cards accounts.

It is necessary practice a lot of diligence when you make a balance transfer. You should look out for terms and conditions in fine print and be clear about everything. For example, some banks may charge a transfer fee which is the same amount as the percentage of balance transferred. In this case the whole purpose of balance transfer is lost. Hence see to it that the balance transfer charge is no more than seventy-five dollars otherwise you may end up paying a couple of hundred dollars that defeats the whole purpose of balance transfer. See to it that the bank is not charging a high annual fee as today most of the credit card companies are giving you free credit cards to attract more and more customers.