What is a Balance Transfer

The term credit card balance transfer comes up a lot these days, especially with new credit card offers, but how do they work and are they good for your credit? Should you take advantage of a credit card balance transfer?

What is a Balance Transfer

You might also like:

Should You Pay Off Your Credit Card in Full?

You may have been told that paying off your credit card in full is a good thing to do, or maybe you were told that you shouldn’t pay it off in full because having a balance helps your credit. The truth is neither is right or wrong, depending on your situation. Let’s say that you have [...]

A balance transfer is simply the process of moving a balance of one or more credit cards to the balance of another credit card, which usually has a lower APR. There are some cards that charge a fee to complete the transfer.

Most credit card providers will offer these types of accounts for new customers, even enticing them with special incentives to sign up, including interest-free period, low interest rates, loyalty points or rewards. Always read the fine print.

You might also like:

Getting Credit Cards With Bad Credit

Getting Credit Cards With Bad Credit Getting a new credit card with bad credit can be extremely difficult, but not always impossible. There are different types of credit card offers out there for different types of “bad credit,” or poor credit. First, you need to ask yourself why you want a new credit card. A [...]

As Discover.com points out, you can only transfer an amount up to your credit limit on your new card.

Why Use a Balance Transfer

You might also like:

How to Pay Off Credit Card Debt

Credit cards can make or break our credit, and with the way the economy is, it can cause piles of debt and a ton of stress. Was it worth it? Probably not. Want to learn how to pay off credit card debt and get rid of the headaches? Follow along as we do our best to show [...]

Using a credit card balance transfer is beneficial to those who may be paying higher interest rates on their other card(s), whereas the new card being used to transfer old balance(s) has a lower APR. For instance, if you have a credit card (“A”) that you pay 18% APR on, it may be a wise choice to take advantage of a credit card balance transfer if you’re able to get a much lower APR to pay off the old debt with (potentially) lower monthly payments.

Just be sure to read any fine print as these low interest rates can be tricky. Some may have an interest free period, or a low interest period, which can expire and suddenly shoot up to a much higher interest rate than you originally thought. In fact, some no to low-interest cards will even charge you interest for purchases. Always read the fine print!

You might also like:

Credit Cards That Help Build Credit

Many people struggle with credit, but this is fairly normal in this day and age, especially when you consider the economic issues of today, as well as the lack of financial education available to children and teenagers. With these things considered, there are still ways to build or fix your credit with credit cards. There [...]

You may be able to use a balance transfer for other accounts, not just credit cards. Check with the card issuer that is offering the balance transfer.

It may also be beneficial to those who want to make their monthly payments easier. If you currently have 4 cards that you’re making monthly payments on, you may want to do a balance transfer to turn those 4 payments into 1 monthly payments to make your life easier.

You might also like:

Smart Ways College Students Can Use Credit Cards

Building credit can be a scary thing, especially for young students in college taking their first steps out of the safety nets of living at home. But the truth is it doesn’t have to be a scary thing, it’s not even really a hard thing to do. There certainly is, however, a right way to [...]

Who Qualifies for a Credit Card Balance Transfer

Most credit card issuers will require good to excellent credit in order to qualify for no to low interest rate balance transfer cards. Your best bet would be to check approval scores from sites such as CreditKarma to decide on whether you can qualify. Many users post their score when they are approved or rejected to help other consumers make a better decision.