balance transfer?

Question

when we apply the credit card, we can always see these: 0.9% on balance transfers .....or 1.9 %balance transfers? waht does that mean?

Answer 1

if you have an outstanding balance on, let's say, another credit card, you can transfer that balance to the new card you are applying for. chances are, the interest rate on the new card will be lower than the interest rate being charged on your card with the balance.

those low rates typically are only good for a short period of time (teaser rates). after that period expires, the interest rate will shoot up to some disclosed percentage.

there is usually a fee to transfer balances as well.

make sure you read the agreement.

Answer 2

The Balance Transfer allows you to transfer preexisting credit card debt from your old card to the new card. One thing you should pay attention to, is that the balance transfer rate is almost always considerably less than the purchase APR, or the default APR.

You may also be charged a fee for transferring your balances, which won't make the offer as enticing when you do the calculations. Such as '0% balance transfer rate, fee: 3% of balance, or $50 whichever is greater'.

Please also note, that if you plan on carrying a balance on a card offering you an enticing balance transfer fee, your payments are applied to the LOWEST APR first, so that you carry a balance with a higher APR rate.

To clarify, say I transfer $1000 to my new Visa account, at a 0% balance transfer rate, but my purchase APR is a whopping 29.99%. Say afterwards, I make $200 in purchases, for a sum balance before finance charges of $1200 on the account.

When the bill is due, I may pay towards the $200 in purchases, thinking that it will automatically be applied to that lesser balance, and not the interest free balance transfer, or sum balance. Wrong! The credit card company will apply the payment to the 0% balance, allowing the $200 @ 29.99% APR balance to accumulate interest. If I continue to charge on that card, eventually, I will pay off the 0% interest rate, and be left with the 29.99% APR in the end.

Answer 3

The percentages shown for the balance transfers from other credit cards or loans that you have. That means they will pay off your other credit card at a certain percentage interest on the outstanding balance. For example, you owe $1000 to credit card A and $400 to credit card B. Credit Card C has offered to allow you to transfer all of this debt to them for a 1.9% APR. That means that credit cards A & B will be paid off and credit card C will have $1400 balance paid at the 1.9% APR interest rate.
Caution---one problem with these offers is that (in the fine print) if you miss a payment or are late with a payment, they can jack up the interest rate to in excess of 21%. They use the promotional rate to get your business. If you keep current on your bill, there should be no problems. I hope this helps.

Answer 4

It means they want you to take any outstanding balances on other credit cards and transfer those balances to their card. These terms are usually temporary, that is they will expire in 6 or 12 months. It is only to your advantage if you can pay off the transferred balances before the term expires.
What they are counting on, however, is that you won't pay off the balances and will continue to purchase things using the new card. In other words, loan you more money at a higher interest rate.
Always remember that the only reason they offer these incentives is because they wind up making more money in the long run.

Answer 5

When a credit card is offered to you, they tell you about a low rate for balance transfers. What this means is that you can transfer your existing balance on other credit cards over to this new card at this lower rate. This does have a time limit, or else all pymts to your new card are first credited to the balance transfer portion until it is paid off.