A Balance Transfer Transaction With Credit Cards
A credit card balance transfer transaction is the process of transferring the balance or debt owed on one credit card to a different credit card. Balance transfer transactions allow credit card holders to shift debt between different credit cards.
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Benefits
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Credit card balance transfers can allow credit card holders to consolidate credit card debt onto a single card so that they only need to pay one credit card bill. Transferring balances from a card with a high interest rate to a card with a lower interest rate can result in savings.
Potential
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Credit card companies sometimes offer low introductory rates for credit cards. Transferring debt balance onto a card with a zero percent introductory rate can allow the credit card holder to go without paying any interest during the introductory period.
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Drawbacks
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Some credit card companies may charge fees for balance transfers. Transferring balances to a new card with an introductory rate can be costly if the rate after the promotional period is high or the card requires other fees.
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