First of all, let’s explain what credit card balance transfer is. If you are a credit card holder, and you open another credit card account for the purpose of paying off the old one, this is known as credit card balance transfer. Consequently, the interest and debt is owed to the new credit card company; this company would normally allow a period of grace involving smaller amount interest charges on the balance transferred. You may likely find one or two percent interest, even zero interest. This rate is known as the introductory rate and may linger for about one year or six months following the balance transfer. Oftentimes, the transfer does not require any fee – so, you can leverage the option if you have mailing address and valid social security number.

Can Credit Card Balance Transfer Provide Credit Card Debt Relief?

Credit card balance transfer helps credit card holders to get credit card debt relief. Today, credit cards have become huge business, a lot of the market players (credit card companies) are realizing huge profits off finance charges. On most credit cards, the APR (Annual Percentage Rate) on the average is approximately 16 percent. Going by this interest rate, paying down a credit card may not be easy since it adds principal and charges interest consistently.

If you are an experienced consumer, you can reduce debt substantially with a credit card balance transfer. You will become free to make a down payment of a credit card balance and would not incur any extra interest charges. If you embark on this strategy, you could potentially open a fresh credit card account that provides a balance transfer at the expiration of the old account. Subsequently, you will move the entire balance to the newly acquired card, then a new grace period begins with little or completely no finance charges.

The beauty of credit card balance transfer is this; it benefits both the consumer and the credit card company. Credit card companies also take advantage of this strategy to win new customers, and more money of course.

Points to Ponder On

No doubts, balance transfer strategy is a welcomed practice. However, a lot of dogged effort is required. You need to be thorough in examining the entire content of the balance transfer offer. Sometimes, the new credit card company you are transferring to may pose some hidden charges on the fine print handed to you. Such hidden charges include annual fees, transfer fees, as well as joining fees. Ask questions and be sure you are not paying extra fee other than the conspicuous fee. Usually, the transfer fee is calculated as a percentage of the total transferred balance, and this fee could be significantly high, especially when it is capped.