A balance transfer is typically a move from
one credit card account to another. There are several reasons
for taking this action.
Many credit card companies offer free balance transfers as
a promotion to new customers. In most cases, those transfers
are accompanied by lower annual
percentage rates (APR) as an incentive to build their
customer base. One of the most important things to remember
is that those introductory rates are often short-term and
will be replaced with higher interest rates later. Credit
card balance transfer can be an unhealthy credit habit. Paying
the balance of one credit card with another doesn’t
ultimately lower the amount owed. If you’re considering
a balance transfer, be certain that you’re accomplishing
more than simply eliminating a creditor.
Lower interest rates are important, as are terms of repayment.
If a balance transfer doesn’t seem the right step, consider
a consolidation loan. Rates on a traditional loan may be more
favorable than those on credit cards.
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