Balance transfer can be stated as switching from an existing credit to a new credit card along with a new plan with low interest rate. The process is completed when the existing debt balance of the existing card is transferred to a new credit card.
It is a tactical way of saving money as the new credit holds lesser interest than the latter one. Customers can find several credit card companies offering them new plans with lower interest rates and other handsome rewards and offers.
Executing a balance transfer is not a tough job to be implied. You can provide the details of your existing card to your credit card company and they can complete the process on your behalf. Otherwise you can also do it with the help of online banking. The best time for balance transfer is while grabbing a new card when you are offered a special introductory package.
Balance transfer can also be processed from an existing card to an existing card. It has the same process as stated earlier. Though some extra charges may apply while transferring. Read the fine print of the balance transfer very carefully before opting it.
Credit Card companies may lure you with attractive rates for balance transfer. The rates that they show may apply for a few months after the balance transfer. After that you would be forced to pay the normal rate. Also it depends on how consistently you are paying back the dues, how well you are maintaining your account. A single late payment or failure can end the low rate and drag you towards higher interest rates. So it will be a wise thing to choose a normal rate for balance transfer that is lower than the existing interest and is a static one.
Qualification for balance transfer is also required. Qualification depends upon your current credit card usage pattern , your credit card history, annual income and etc.