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.

BREAKING DOWN '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. What's the difference between a balance transfer and a cash advance?

    Learn how balance transfers and cash advances differ, how these transactions can both benefit and hurt your finances, and ... Read Answer >>
  2. Can I get a balance transfer if I have bad credit?

    Transferring funds from one credit card to another is often possible with bad credit, but it will likely cost you in interest ... Read Answer >>
  3. When is a balance transfer a good idea for paying off debt?

    Learn the best situation in which to do a balance transfer, enabling you to pay off your credit card debt more quickly while ... Read Answer >>
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