Credit Card Balance Transfer,
A Tool to Pay Off Debt

A majority of credit card issuers offer rates as low as 0% for a set number of months. Always make sure to verify what the rate increases to after the 0% promotional period ends. You may not save much money if you can't pay the balance transfer off during the promotional period. See some cards that offer 0% balance transfers.

Some banks may also offer rates such as 1.9% to 7.9% until your balance transfer is paid in full. This type of rate may be the best option depending on how long it will take you to pay off your transferred balances. You'll save more money over a few years at a low rate than you will at 0% for a set period with it eventually going to a high rate. View some cards that have a balance transfer offer at a low rate until paid off.

Nowadays, everyone is trying to get out of debt. Utilizing a credit card balance transfer will help you. The biggest benefit to doing a balance transfer is to potentially save money in interest. Due to having a lower annual percentage rate on the balances that you transfer, you also pay off your debt a lot quicker.

Another benefit of balance transfers offered by some credit card issuers is the option to use the transfer for cash. Some banks allow you to receive an electronic funds transfer into your checking account or send you a check made payable to you that you can deposit. The funds can be dispersed by you to whomever, whether it be to your credit cards or to pay for home improvements or other unexpected expenses. Check with your credit card issuer to find out if this option is available. It may save you money over just making the purchase with your credit card at the standard purchase APR.

When doing a balance transfer, there are some disadvantages to watch out for. First, watch out for balance transfer fees. A credit card balance transfer may incur a fee up front, just like with a cash advance. The credit card industry feels that consumers are taking advantage of the balance transfer system. Some consumers play the balance transfer game of moving balances from credit card to credit card constantly and never actually lowering their debt. They even go as far as making their credit card payments each month with credit card balance transfers. Banks impose this fee to help reduce these actions.

Balance transfer fees vary depending on the credit card issuer but a good standard is around 3%. Even if it's in your credit card terms, banks may not always charge this fee. It depends on the specific offer you apply for. I see more balance transfer fees imposed on 0% balance transfer offers than rate offers such as 3.9% to 7.9%.

A second disadvantage to a balance transfer is how your payments are applied. A majority of credit card issuers apply payments made on your account to the lowest rate first. They'll leave purchases you may have made on the account sitting at a higher rate until you pay off the balance transfer. If you make too many purchases on the account, it may wipe out the benefits of even doing the balance transfer. Make sure that you read the terms of the credit card before hand. The terms should advise you how payments are applied. If in fact it's towards the lower rate, seriously consider not making purchases on the account after doing the balance transfer.

An additional disadvantage to not only balance transfers, but also low rate credit cards in general is defaulting on your credit card terms. It is crutial that you don't make your payments late, go over the credit line, or have a returned check on your account. If you do, you're rate will increase to the default rate which, on average, is around 30%. You definitely won't be saving money then. Credit card issuers will increase your rate with just one occurrence of default. I see people everyday that have an account only 1 or 2 months old that this has happened to. Don't step foot in their shoes.

One final disadvantage of a credit card balance transfer is that most credit card issuers will not allow you to transfer balances from accounts you already have with them to a new account with them. I have customers all the time trying to do this. They want to save money on their finance charges since the rate on their existing account is normally higher than the rate on their new credit card. It's comparable to making a payment on your credit card with that same credit card. It's just not possible in the business world.

Now that I've covered the advantages and disadvantages of a credit card balance transfer, you can find some cards below that offer a balance transfer option. Select the card name to get a detailed review of the specific cards. Also view my opinion of the best balance transfer credit cards. Another option you have is to compare several credit cards that offer a balance transfer options side by side by selecting the link below.

No matter which card you choose to do a credit card balance transfer with, just make sure you're doing the transfer for the right reasons. Credit card balance transfers were designed to help get you out of debt quicker. Make sure you use this tool in that sense. Contact me with any questions you have regarding balance transfers.

What do you do when the end of your balance transfer offer is drawing near? Here you'll find a few suggestions that can help you save time and money.

Don't get taken to the cleaners with balance transfer fraud. Here you'll learn how this type of fraud occurs, how to prevent this misfortune, and how to rectify this popular form of credit card fraud.

With a no interest balance transfer offer, you can save hundreds of dollars on the money that you already owe. Consolidate your debts to one credit card with this popular balance transfer option.