17 votes
Accepted

In layman's terms, what is balance transfer?

Typically you can use credit card balance transfers to consolidate some, or all, of your other loan balances in one place. The interest rate might be lower. Some prefer to make one payment rather ...
Pete B.'s user avatar
  • 76.5k
14 votes

What is a way to plan and return the "balance transfer" of a credit card?

I got "offers" to do balance transfers for US$8000 or US$16,000 for an upfront rate of 2% or 3%, but after 1 year or 18 months, the rate would go up to 22% APR. Assuming that the fee is 2% ...
mhoran_psprep's user avatar
11 votes
Accepted

Using credit card balance transfer to pay Mortgage line of credit

You should check the details of those balance transfers - they typically have a 3 to 5 % 'one-time fee', which means you pay nearly a year's interest right away. And then every time you transfer the ...
Aganju's user avatar
  • 37.7k
11 votes

In layman's terms, what is balance transfer?

Since you are not paying the full balance off each month you are carrying a balance from month to month. That balance is being charged some interest rate X. With a balance transfer, the new credit ...
Eric Johnson's user avatar
  • 2,427
9 votes
Accepted

How to interpret this paragraph from a credit card company

You are misunderstanding the answer. Suppose that you are in the habit of paying off the total balance due shown as due on your most recent monthly statement in timely fashion (meaning on or before ...
Dilip Sarwate's user avatar
9 votes

What is a way to plan and return the "balance transfer" of a credit card?

There is no risk-free way to take the cash advance and do anything with it that would be guaranteed to come out ahead in the end. What I have done in the past (I am not recommending you do this, just ...
D Stanley's user avatar
  • 135k
8 votes

Are there any pitfalls to balance transfer checks?

The pitfalls are: not paying it off during the so-called 0% time limit, and accumulating more debt in the meantime. the balance transfer is rarely 'free', it's common to have a 3% fee/$25 minimum ...
RonJohn's user avatar
  • 50.7k
6 votes
Accepted

Auto Loan and Balance Transfer

This is what your car loan would look like if you paid it off in 14 months at the existing 2.94% rate: Principal Interest Payment $15,000.00 $36.75 -$1,091.22 $13,945.53 $...
quid's user avatar
  • 49k
5 votes

In layman's terms, what is balance transfer?

Note: the question is tagged united kingdom, this is a UK focussed answer practices elsewhere may be different). A balance transfer moves your debt from one credit card to another. This can be a ...
Peter Green's user avatar
  • 2,944
5 votes
Accepted

Can I use a balance transfer offer to pay off someone else's credit card debt?

The implied intent is that balance transfers are for your balances, not someone else's. However, I bet it would be not only allowed but also encouraged. Why? Because the goal of a teaser rate is to ...
Pete B.'s user avatar
  • 76.5k
5 votes
Accepted

If you have a different interest rate applicable to a part of your credit card balance, how does this apply in monthly payments?

If I pay back $10k the next month, will they apply to it zero rate or the 12%? Read your card agreement and the terms and conditions for the 0% offer. In most cases, it will clearly state that any ...
Hilmar's user avatar
  • 7,850
5 votes

What is the "current" way in GnuCash to "park" the money during a bank transfer?

The first, and simplest, way is just to record the transfer as notionally all happening on the same day. That is, if you record money leaving your account at Bank A on the first day of the month, you ...
Greg Schmidt's user avatar
  • 1,463
4 votes

What is the catch with "balance transfer" credit cards?

They immediately make money by charging you the initial 2.39% fee. In the long term they make money because a surprisingly large number of customers don't pay the balance off, or otherwise violate ...
davmp's user avatar
  • 2,283
4 votes

Can you switch credit cards annually to avoid interest if you have no outstanding balance?

It is kind of standard practice, and the way you are proposing you should be just fine provided nothing goes wrong. As I understand it, you will get a new 0% card and charge this large purchase on it....
Pete B.'s user avatar
  • 76.5k
4 votes

In layman's terms, what is balance transfer?

A balance transfer is paying one debt instrument with another. While this is typically seen in credit card offers it isn't necessarily confined to credit cards. Obviously the only reason to do this ...
quid's user avatar
  • 49k
4 votes

Can I use a balance transfer offer to pay off someone else's credit card debt?

I just received a transfer offer - Seems to me, they don't care what I do with the proceeds. Options 1 & 2 make that clear.
JTP - Apologise to Monica's user avatar
4 votes
Accepted

How exactly do balance transfers work?

A balance transfer is used to transfer an outstanding balance from one credit card to another. Or to put it another way, you are using one credit card to pay off the other. In your case, you could ...
Simon B's user avatar
  • 10.4k
4 votes

If you have a different interest rate applicable to a part of your credit card balance, how does this apply in monthly payments?

tl;dr: As long as you have enough available credit, if the "balance transfer" will pay you cash directly into a bank account, then you can do what you propose. Details: ...I heard that, due ...
TTT's user avatar
  • 47.2k
3 votes

In layman's terms, what is balance transfer?

From the card issuer's point of view, the purpose of balance transfers is very simple. A credit card company wants you to owe them more money, so they will make more profit getting more interest ...
alephzero's user avatar
  • 4,433
3 votes
Accepted

Can you switch credit cards annually to avoid interest if you have no outstanding balance?

If you read a bit on this site you will see warnings about closing accounts. Yes, what you propose to do can work, as long as your timing is right, and you watch your score. You get a minor ding for ...
JTP - Apologise to Monica's user avatar
3 votes
Accepted

High credit utilization, some high interest - but credit score not overly bad. How to attack debt in this situation?

You need to pay off the entire balance of 7450 as soon as possible. This should be your primary financial goal at this point above anything else. A basic structure that you can follow is this: ...
jkuz's user avatar
  • 3,970
3 votes

Credit CARD Act and applying payments to recent purchases and balance transfer

I used to work for a major US-based credit card company (CapitalOne) like 4 or 5 years ago as an outsourced agent. The way it works (or it used to, I don't think it has changed tho) is if you have a ...
Garchi's user avatar
  • 31
3 votes

Do I lose the grace period on new purchases after a promotional balance transfer on some cards but not others?

Yes. That's typical. When money is outstanding via cash advance/transfer you lose the grace period for new purchases. The minimum payment on the cash advance is still due and is credited first. Any ...
JTP - Apologise to Monica's user avatar
3 votes

How exactly do balance transfers work?

You owe $341 on the first card and $320 on the second. A typical balance transfer is done with a brand new card. They offer 12 months at no interest, and a one time transfer fee of 2-3%. They are ...
JTP - Apologise to Monica's user avatar
3 votes
Accepted

0% intro APRs complicating payoff plans

This seems to be the minimal cost scenario: Pay into Account 2 for 4 months, then either 1 or 2 for 3 months. Then pay down Account 3. (Shown colour shaded). Then finish paying down 1 & 2. ...
Chris Degnen's user avatar
  • 9,797
3 votes

If you have a different interest rate applicable to a part of your credit card balance, how does this apply in monthly payments?

Just yesterday my bank called me about CoViD relief, and I asked this very question. They said my monthly statement minimum payment works against the lowest interest rate amount. However, any ...
Harper - Reinstate Monica's user avatar
3 votes

What happens if you do a balance transfer for more than you owe?

Do you end up with a negative -$3k balance on A? If you overpay, A will typically refund the money after some period of time. Or would B typically ask A for your current balance and only do a $1k ...
Hilmar's user avatar
  • 7,850
2 votes
Accepted

Balance transfer reward, is there a downside?

As long as the fine print permits this, it's a quick 2%. Be careful that your credit score may drop momentarily if you use the credit and for that cycle have high utilization.
JTP - Apologise to Monica's user avatar
2 votes
Accepted

Interest charges on balance transfer when purchases are involved

Its called a "Grace Period" and you are not paying interest on the 0% BT, you are paying interest on the amount you spent in purchases If you do not pay your balance in full by the due date your ...
Eric's user avatar
  • 314
2 votes
Accepted

Credit influence of transferring debt to new account

If you are applying for a new loan product it would not be recognized as the same account. That could lower your credit score slightly by reducing your average age of accounts, though this hit to your ...
GForce's user avatar
  • 333

Only top scored, non community-wiki answers of a minimum length are eligible