A balance transfer moves eligible debt from one credit account to another, often to take advantage of a promotional interest rate. It can reduce borrowing costs, but it is not a way to make debt disappear.<\/p>\n
The main reason is to reduce interest during a promotional period. If a card offers a temporary low rate, more of each payment may go toward reducing the principal instead of paying interest.<\/p>\n
Balance transfers often involve a fee based on the amount transferred. That fee should be included when calculating the total cost.<\/p>\n
A low introductory rate is temporary. Before transferring a balance, determine when the promotion ends and what rate may apply afterward.<\/p>\n
A balance transfer works best when accompanied by a repayment plan. Moving an existing balance while continuing to spend heavily on new credit cards can leave the borrower with even more debt.<\/p>\n
Estimate the transfer fee, expected payments, promotional period, and potential post-promotion rate. Then compare those costs with keeping the existing balance.<\/p>\n
Not every balance can necessarily be transferred, and issuers can have rules about which accounts qualify. Read the terms before making assumptions.<\/p>\n
A balance transfer can be useful when it creates a clear path toward repayment. It becomes much less useful when it simply moves debt from one account to another without changing the underlying spending and repayment pattern.<\/p>\n","protected":false},"excerpt":{"rendered":"
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