People with multiple credit cards may find a balance transfer credit card very friendly. This type of card helps users get rid of mounting interest rate charges from different issuers. It likewise helps people avoid the hassles of dealing with numerous financial companies.

Basically, a balance transfer credit card is one that allows an individual to transfer the balance of all his other credit cards into one card. Hence, an individual will only have to deal with one company in terms of paying principal debts and interests.
One major advantage of using this type of service is being able to save money. Most issuers of this type of card offer a very minimal–if not zero–interest rate during an initial period of use, which is usually the first year. A smart consumer should therefore pay a bulk of the combined credit card liabilities during the initial period if he wants to minimize the amount of interest on obligations left unpaid.

After the initial period, the interest rate charged on a customer will steadily increase. In some cases, an interest-rate increase happens more than once. Therefore, it is not advisable to settle a bulk of the liabilities after the initial period, since this will require the card holder to pay more. If this happens, one of the main objectives of using balance transfer cards—which is to save–is defeated.

Consolidating all balances using this card makes life much easier for customers. This type of financial tool has become extremely popular especially in the United States, where many working-class people have been burdened of possessing more than one credit card at a time. Indeed, it is one of the more important financial innovations today in the field of modern purchasing systems.

However, people must be properly educated when using this type of card. Ideally, using the service should be approached with caution just like dealing with any other financial product. Misguided use of this card could increase one’s liabilities instead of reducing them, especially when a bulk of the transferred balance is paid only after the initial period.

Card holders must be mindful in paying their liabilities on or before due dates to avoid making extra interest charges if the initial period has passed.

Shopping via credit often tempts people to buy things even beyond their capacity to pay. Financial discipline is therefore necessary to prevent oneself from being burdened with debts.

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