Credit Card Details

A balance transfer credit card is a card companies issue to entice you to do business with them. For the credit savvy (soon to be you!) this is a beneficial proposition. Since most balance transfer credit cards offer a very low introductory interest rate, usually 0% APR, it's possible to transfer balances  from cards with high rates to this low APR for a period of six months to a year. This is where the tricky part comes in. Careful planning needs to go into paying down the incurred debt. Often, people make the mistake of incurring more debt due to the increased buying power of the additional credit card. The savvy financier will use a balance transfer credit card to alleviate interest payments and pay down the principal until they are completely debt free!

Benefits of a Balance Transfer Credit Card

• Usually low or 0% introductory APR
• Period of low interest allows payments to apply mostly to outstanding principal

Drawbacks of a Balance Transfer Credit Card

• Some card companies charge a balance transfer fee (usually a percentage of the balance transfer)
• APR's are often high after the introductory period