Today all major credit cards offer balance transfer facilities, in fact if you are being offered a credit card that does not offer balance transfer then you should think twice before accepting the card. But before we discuss the advantages and the intricacies of balance transfer the first question is, what is balance transfer? Balance transfer is a facility which allows a credit card holder to use one card to pay off the debt for another credit card. For example if I have Discover card on which I have a debt of around $2000, I can actually use my American Express card to pay off the remaining amount on my Discover card (Assuming I have already starting paying off the $2000).

Once you have understood what balance transfer is, the next question is why would a person want to transfer balance from one card to another? Well the reasons could be varied, the most obvious reason could be that I am being offered a lower APR (interest rate) on my American Express card when compared to the Discover Card, or better still the American Express card might just offer me balance transfer at no APR or additional cost. If you are wondering how one can carry out balance transfer from one card to another for free then this article is designed to help you out.

Most credit cards offer a promotional period where all purchases and debts are given at really low APRs or in most cases no APRs at all, so this means if you were to make a $600 purchase and agree to pay of the amount in instalments for 6 months, chances are if you have a new card you will end up paying only $100 a month, compare this with a normal credit card where you will actually pay around $105 a month and end up paying $630 instead of $600 at the end of six months. The idea is to get a credit card that is offering a promotional offer that allows you to get balance transfer from an existing card (where you are paying interest), and then paying off the amount without any APR.

All you need to do is transfer the balance from your existing credit card to the credit card that is offering you a low interest rate. Also make sure that there are no balance transfer charges. It is very important to keep your eyes open and carefully understand the charges that are involved in balance transfer. Usually credit cards charge anything between 3-5% for balance transfer; however you can get balance transfer for free if your card is in a ‘promotional’ period. In any case make sure you know that the balance transfer is truly free, before you agree to the balance transfer.

Also another mistake most card holders make is that they assume that the balance transfer will take place overnight, balance transfer usually takes 3-4 weeks, it is therefore important to keep on making minimum payments to your existing credit card company until the balance transfer takes place, or else you might end up paying hefty fines.

Another important thing to do before you carry out balance transfer is to understand the APR of your current credit card, you might be getting free balance transfer but it is completely pointless if the current credit card is charging you an APR of 10%. To make the balance transfer truly free, you need to incorporate the various charges that might be indirectly associated with the balance transfer, only once you have taken into account various charges like the balance transfer fee, APR of the new card can you truly call your balance transfer free.

Once again remember balance transfer might take away the pain of paying a high APR, but it does not take away the fact that you still have to pay off the debt you owe the credit card company. You should always work to eliminate debt, and by making savings on the debt you owe one credit card; you should use those savings to pay off debts with other credit cards too, so that by the end of it all you have paid off all your debts and you are truly debt free.

For more information on comparing balance transfer credit cards, or to apply for a business credit card online, please visit

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