Balance transfers are available for credit cards and allow you to take advantage of transferring debt from one credit card to another. Balance transfers are used as incentive to gain customers from one credit card company to the other and most often, the customer uses the credit card that allowed the balance transfer, without being aware of the interest rate that begins at the end of the term.
What are some of the advantages that can be seen from the transfer? This transfer can allow the customer to reduce the interest that is being paid towards debt through the cards by transferring from cards that have higher interest rates to cards that offer the customer interest free periods between six to eighteen months. Through this time, the money which is paid towards the credit card can be directly applied to the credit card's principal, rather than the interest that is accumulating on the balance of the credit card.
Depending on the balance of the card, one can easily save up to several hundred dollars from the balance transfer while making use of the accounts which do not accumulate interest on transferred balances and even purchases.
As well as having advantages, there are certain disadvantages that have become to be associated with the transfer. Although the consumer has access to a very low or no interest period, most often once this expires the increased interest rate is higher than the original card. If the consumer is able to repay the loan or card within the time period before the introductory offer expires, it can be an effective way to repay the debt, but in the case that the individual is not, it is important to consider other options which can allow the customer to save money.
Learning the advantages and disadvantages of the transfer can be an effective way to determine if the transfer can really benefit the financial situation. Through the transfer choices, it is important to determine which offers the best choices and which transfer time period can best correlation with the repayment plan which is attainable for your current budget.