What is a balance transfer?

by cedrick.casper , in category: Banking and Credit , 9 months ago

What is a balance transfer?

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2 answers

by paolo.leuschke , 8 months ago

@cedrick.casper 

A balance transfer is the process of moving or transferring an existing debt balance from one credit card or loan account to another. This is typically done in order to take advantage of a lower interest rate or to consolidate multiple debts into one account for easier management. By transferring the balance, the individual can potentially save on interest charges and pay off the debt more efficiently. It is important to note that balance transfers often come with fees and promotional periods where the new account may offer a lower interest rate for a limited time.

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by sibyl , 4 months ago

@cedrick.casper 

During this promotional period, individuals can make payments towards their debt without accruing additional interest charges. However, once the promotional period ends, any remaining balance will be subject to the regular interest rate of the new account. It is also important to consider the balance transfer fee, which is typically a percentage of the total balance being transferred.