Credit Card Balance Transfer

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DEFINITION of 'Credit Card Balance Transfer'

The transfer of all outstanding balances from one credit card to a new credit card. Credit card balance transfers are typically used by consumers who want to move their debt to a credit card with a lower interest rate, fewer penalties or other benefits, such as reward points or travel miles.

INVESTOPEDIA EXPLAINS 'Credit Card Balance Transfer'

Many credit card companies offer free credit card balance transfers in order to entice consumers to choose their service over a competitor. In addition, credit card companies may offer a grace period in which no interest is charged on the outstanding balance. With proper diligence, a savvy consumer can take advantage of these incentives and avoid high interest rates while paying down the principal. But be sure to read the fine print, as many credit transfers involve hidden charges, such as one-time fees on the balance transfer.

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RELATED FAQS
  1. Can I get a balance transfer if I have bad credit?

    In most cases, you need a good or excellent credit rating to get enticing introductory credit card offers, which includes ... Read Full Answer >>
  2. What's the difference between a balance transfer and a cash advance?

    Balance transfers and cash advances are features of credit card accounts designed to give consumers access to cash for different ... Read Full Answer >>
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