Balance Transfers

There is much hype regarding the transfer of balance from one credit card to another or by using credit and other checks at a considerably low interest rate. The reason is quite simple. The constant canvassing of the major credit card companies to its customers for the purpose of transferring their balance is a very common phenomenon.

An article published in Credit Cards Magazine says that the profit of the credit card companies reached a peak in 2004. It is quite understandable that that the credit card market has reached a point of saturation. Therefore, it can be very well assumed that an account often gets closed for the opening of another one. So for the credit card companies it is always desirable to open a new account on almost every occasion and every opportunity. Various credit packages and offers are offered just for this purpose.

Balance transfer allows these banks to open a new account for the particular card holder or the account holder by the virtue of which his or her older account details will be shifted to the new account of the card holder. Therefore, the bottom line is that by the process of balance transfer there is a mutual monitory advantage for the banks and the cardholder as well, although there are exceptions.

Nonetheless, transfer of balance of an account or a credit card to a significantly lower rate in the introductory stage might raise some questions. One should be careful about the following points, or else the cardholder might end up paying money at a very high interest rate. Always inspect the following the time period of the introductory rate of interest, the annual percentage rate of the card once the expiry of the teaser rate has taken place, and whether there is any involvement of money in the shape of any service charge or fees in the process of balance transfers.

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