Expert creditors use a not-so-secret technique to get their credit card interest rate reduced among their credit cards.  It involves making a balance transfer on a credit card that has an introductory APR.  These credit card APRs can be extremely low or even zero.  In the case of the latter, a person may feel that they are paying with their own cash, since on paper no additional charges are being accrued.  However, it doesn’t often work that way with balance transfer credit cards. 

Firstly, all balance transfer credit cards will only offer an introductory APR temporarily.  For most this period will be 6 months, though there are a few that go as long as two years.  Either way, once the introductory APR ends, a person is expected to pay at whatever APR a credit card company designates.  This APR will usually be much higher than what one could get with a credit card that didn’t offer a balance transfer promotion.  Secondly, once the APR is charged, the remaining money will not go towards paying down transfers that had higher interest rates, at least initially.  This is because the first transfers that get paid down are those that had lower interest rates.  And even then, (as most people who use credit cards know), very little of the credit card payment actually goes towards the balance.  If it did credit card companies wouldn’t be the multi-million corporations that they are.

So, what’s the point of getting a balance transfer credit card if in the long run it won’t be much different than any other credit card?  Well, the key term to think about is ‘in the long run.’  For the short-term balance transfer credit cards offer incredibly low APRs, interest rates that cannot be matched even for the most generous of credit card companies.  But since it’s temporary, it’s important that the balance is paid off in full before the introductory APR ends.  So, in essence, balance transfer credit cards just give a creditor more time to handle their debt.  This fact cannot be dismissed lightly for those who are attentive to their budget.  Transferring a balance from one credit card that is charging an interest rate of 16.5% to a new credit card that has a balance transfer program at 4.9% for six months is a great deal.  The deal turns sour only when you don’t that transferred balance within the teaser period.

There is another thing that can be done with balance transfer credit cards, particularly those offering 0% APR.  Since balance transfer credit cards do allow for credit to be deposited into a person’s bank account, there’s an opportunity for a person to accrue their own interest, provided they have a savings account or a money market checking account.  When the introductory APR ends, the person will withdraw the funds from their account to cover the balance.  What is left over is pure profit… the interest paid from the bank.  Granted, it won’t be much, but it’s a great way to get a little bit of cash while trying to attain a good credit history. 

The only thing a person should be careful about to make sure they have the best credit card in either scenario are fees associated with balance transfer credit cards.  For example, many will charge up to $75 each time a credit card balance transfer is initiated.  If an individual is planning on using the credit card balance transfer to earn interest from their bank, they must make sure this fee doesn’t supersede their profit once they have to pay the balance back.  And those who want to use the credit cards to lower their credit card interest rates need to make sure they make transfers only once to limit these fees.  To find the best credit card rate, balance transfer solicitations should be reviewed carefully and compared to similar offers that may fit your budget and spending habits.  If you haven’t been lucky enough to get a new credit card application in the mail with a balance transfer solicitation, get a new credit card online.  Sort through the credit card offers by balance transfer attributes and choose a new credit card that is the best credit card for you.

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