How It Works Credit Card Balance Transfers

Credit card balance transfers for fair credit is common today. Credit card balance transfers in very simple terms refer to the swap of credit cards whereby the old credit card with a higher rate of interest is given up in favour of a lower interest rate credit card. It involves shifting a part or the entire debt to another financial credit provider to another so as to take the benefit of interest rates which are lower and thus advantageous.

Today customers often find themselves cash strapped. Hence, a customer can expect to get:

  • Monthly payment consolidation into one.


  • Usually credit card balance transfers at 0 % fees or very low fees.


  • Terms and handling charges clarity if any must be sought at the outset which depends on the transfer amount size. This set of fees should be considered when comparing options.


  • Higher interest balances will get reduced first and lower interest balances later.


  • Allows single payment window as opposed to manifold payments across multiple cards.

 Credit card balance transfers with no fee are today a popular option for common people who want a better lifestyle. Things to watch out for are as follows:

  • One must plan out finances to ensure that the payout occurs within the period the 0% offer is there. This is because once the period is over the cost of repaying the unpaid portion of the transferred debt will become extreme. This period of 0% maybe 2 years or more and if the entire transferred debt is paid within this time window offered at the time of transfer by the new financer, then there will be no interest charge on the transferred balance. However, the full amount could not be paid and substantial sum remains unpaid then another transfer or even a shift back considering rates may be opted for.


  • One should avoid withdrawing cash or spending much on balance transfer cards which are cheap. This is so since the rate may not be cheap if one is unable to pay off the balances in full including purchases and transfers. The monthly payment will be applied by the bank first upon the fresh spending.


  • Expensive rates and even deal withdrawals await you if one does not come good on at least the minimum set monthly disbursements.


  • There are banks which allow transfer to lower rate deals of existing balances. This is a swap or shuffle option usually sought by people with a poor credit score. Thus, credit card balance transfers for existing customers are made available with a lower APR.

Credit score is very important for a better score on the balance transfer eligibility test.

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