How Do Balance Transfers Work?

Video Transcript

"This is financial adviser Patrick Munro talking about how do balance transfers work. Balance transfers are a credit card methodology where by you can take the balance of one credit card and move it over to another credit card hopefully with a lower interest rate. That's why you would do that. Also for the purpose of consolidating your debt. Many times you'll have multiple credit cards and one credit card that has a larger available line of credit. And you would draw in your other credit cards into this one credit card with the lower APR and so therefore you will have just one credit card. And therefore lower your overall debt exposure. Balance transfers do carry a fee sometimes so be cautious that you are not paying excess fees to bring new money into the new credit card company. But it is a good strategy to consolidate your debt and make sure that you are always going from a higher interest rate to a lower interest rate. This is financial adviser Patrick Munro on how does a balance transfers work."