A balance transfer credit card is a credit card that has a special introductory offer to entice new customers to a particular lenders credit card. This is so that the lender can increase their market share of customers using their credit cards. A balance transfer credit card will usually offer a zero or very low interest rate per annum on existing balances that are carried each month on competitor credit cards. When the outstanding balance is approved and transferred to the new credit card the zero or low introductory rate will apply for a set period of time known as the term. The term of the offer is generally stipulated in months and common examples are 3, 6, 9 and 12 month offers.

Balance transfer credit cards may or may not also offer low introductory rates on purchases however it is advisable to not use the card for new purchases until the balance has been repaid in full as new purchases will sometimes be treated as cash advances that accrue interest without interest free days regardless of the introductory rate for the balance transfer.

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Posted in: Debt Consolidation | Tags: balance transfer credit card