Credit card balance transfers simply means pulling out credit purchases from one card with a higher interest rate and transferring it to another card with lower rates you can work on. This is effective to avoid spending too much on interest charges that you could instead add up to your savings.
First of all, check your payment habits before deciding to transfer balances. You should also know that some banks charge transfer fees while others do not. If the credit card balance transfers involve two banks not affiliated from each other, you will most likely be charged with transfer fees. The idea is to save on costs so you want to compute for every possible action you intend to do. In the end, you ask yourself if a balance transfer will enable you to save money while accounting for all possible fees, not just interest rates.
Credit card balance transfers work very simply. It is only a system generated process that can be completed in a matter of minutes. What you will need to do is to input important details like account number and how much you want to transfer, plus the card details of where you want to transfer an amount. Make sure that the credit limit of a card that will carry the balance transfer is enough. Also, check if this card has current purchases you need to settle.
The problem sometimes with transferring all balances to one card is that it will only have one due date whereas if you spread your credit to different cards, you will pay less in different dates. Also consider this before you decide to do balance transfers; even with zero interest introductory promo offered in one card, will you be able to afford it if all credit is accumulated in just that one card?
There are generally two types of credit card balance transfers. The first is called 0% Balance Transfer. This type of card entitles holders to zero interest on balance transfers for a limited period. However, the catch here is that you have to clear your balance within a time frame set by the bank to get full benefits. Otherwise, the remaining balance will be charged with interest rates depending on the bank’s discretion.
The second type is called Life of Balance. If you are worried that you will not be able to transfer balances fully given a certain time period, the Life of Balance card is probably much better. With this type, transferring balances are charged with interest. However, this interest is definitely lower than the standard rates for as long as you pay at least the minimum amount required every month.