How to Use the Balance Transfer on Credit Cards

Balance transfer is an option that credit card companies offer on most of their credit cards. What that means is that you can move the entire balance or part of it from your old credit card to a loan or to another credit card. Perhaps that does not make a lot of sense at first, because you still need to pay the loan off and why go through the trouble of transferring the balance to somebody else?

However credit card companies see this as a great way to get another person to use their credit cards, so they often attract people with 0% APR for anywhere between 6 or 15 months, that can make this option very beneficial, but there are things you should be aware of.

What to look out for when doing a balance transfer

Balance transfer fee

Introductory offers with no fee can be found, but often the introductory offer will be associated with a small fee as a percentage of the balance transfer. Some offers will cap the fee at a certain level, but it can also be an uncapped fee.

Cut-off date

Initiate the transfer before the offer expires or you will receive the standard balance transfer APR and fee.

End of introductory period

Be prepared for the standard interest rate that will be applied to your remaining balance once the introductory period ends.


Unless the offer includes 0% APR on purchases as well, you should avoid using the credit card for purchases during the introductory period.

What happens when the balance transfer period is finished?

As mentioned previously you will receive the standard APR, but plan ahead and paying high interest rates can be avoided. You know ahead of time when the offer expires, and can look for new credit cards that includes introductory offers from other credit card companies. Start the new balance transfer 4-6 weeks before the old offer expires, to allow time for credit card application to be approved and the balance transfer completed.

Look at your overall debt

Balance transfers can be a great way to reduce your overall debt, because you can apply the payment towards the debt and not the interest, but if your debt is slowly increasing during this time frame, you can be in over your head and need to look at the monthly expenses.

Source by John Allen

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