The importance of zero balance transfer

Thursday, January 2nd, 2020
Updated: January 2nd, 2020
The content is accurate at the time of publication and is subject to change.

Balance transfer is the process of transmitting the balances between two credit cards, where the outstanding dues are migrated from a card with high APR to a ZERO interest credit card. Several renowned banks in addition to offering debt transfers from the existing cards to the new ones also include transfers of bank loan amount onto the new card for a fixed timeline. Such loans attract 0% or low interest rates.

For those of us struggling with the payment on high interest rate cards, balance transfer credit cards are an excellent choice. Stiff competition and the objective to attract consumers, credit card companies are offering attractive deals on balance transfers. Some card issuers have 0% APR or 0% interest on the balance transfer and they prefer to call it “credit balance transfer rewards”.

How can balance transfer help? Balance transfers come handy when people despite of paying regularly have outstanding dues on their cards. The balance is transferred over a fresh card that carries no interest for a stipulated time period. In order to enjoy the benefit of such a great bargain, you must have paid a minimum balance on the cards before transferring the balance. Nonetheless, balance transfer must not be made a habit, especially when you have mounting debts.

Balance transfer enables you to rebuild your credit history and re-create trust with your bank or financial institution.  More often than not 0% APR on the balance transfers extend for a period of 12 months. However, there are companies that offer 0% APR for 18 months. Availing balance transfer is not a cakewalk; you must first establish and maintain a good credit record. Further, you can close the account to avail the “credit balance transfer reward”, before a higher interest rate begins to apply provided you continue to maintain a good payment record.

With the increasing dependability on credit cards, it has become inevitable for credit card companies to launch new features that make the cards more consumer-friendly. Rather credit card companies have been striving to achieve this, ever since their inception. Even though there are several benefits linked to the zero interest balance transfer, yet you must read the fine print in respect to hidden costs or towards processing handling charges. Also, you must ensure that you pay your monthly installments on time to continue enjoying its benefits. In case if you default on payment and the 0% APR timeline expires, you would have to pay far greater than you would have expected. The benefits on balance transfer cards have strings attached. If you are considering subscribing a zero balance credit card, then you must get your calculations correct, lest you may be in for a rude shock at a later stage.

Before signing up for a balance transfer it is wise to analyze various costs and factors that may lead to loss of benefits. These costs include balance transfer fee, high interest rates post the introductory period, annual fee, and penalties including late and overdraft fees. Since these costs can negate the benefits, therefore you should take a calculated risk.

Since balance transfer is used to get rid of overbearing credit card expenses, hence it has its most innovative use while paying a credit card debt that is coming up very close but you are running short on money to pay it out at that very moment. Thus, if you are expecting some help on you finances at a later point in time, it is best to transfer the existing credit card debt onto a new card that bears 0% APR or low interest rate. You can then slowly pay off the revolving balance once and in for all on your new card. Today, several credit card holders are opting for this unique option to pay their debts swiftly and effortlessly.

Balance transfer can be effortlessly obtained as your financial institution leverages the benefit of getting online and availing this option from there. It comes handy not only to deal with you grave financial situation but also for others whom you want to help – you can have them send their balances onto your balance transfer credit cards. That said, it is a good idea to recommend this unique opportunity to your loved ones.

Shifting balance to an account does not hold true only for credit cards, but also between bank accounts and credit cards. You can use this feature with a bank account that allows you to carry out this procedure. If approved, you can synchronize your bank account with your credit card in a manner that will assist you in making payments on time. Hence, balance transfer is amongst the most useful features of credit cards.

As a rule, balance transfer credit cards provide 0% or lower or introductory interest rates initially, which steeply climb after the cessation of the introductory period. Therefore, you make certain that you pay off the outstanding debt as soon as possible. A good way to do it is to pay back a minimum amount, every month in a manner that the balance is paid off completely before the termination of the introductory period. Remember, if the outstanding debt is not paid in stipulated time-frame you would end up paying much more than you had asked for.

To keep the customers interested in their cards, several balance transfer credit cards companies offer air miles bonus during holiday season. For instance, you may receive $100 discount if you have spend $600 or more during the first quarter of availing services. Sounds a lucrative deal, yet you should be careful of such strategies and avoid splurging just to avail the discount.

We advise you not to close your old credit card account because you will adversely affect your credit rating. Wondering how? Closing your old account will cause a reduction in the available credit limit, and expands the credit utilization ratio. It is a bad choice, if you are considering purchasing a property in the near future.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Latest Balance Transfer Card News

Thursday, March 12th, 2020

According to the 2019 Balance Transfer Credit Card Report from CompareCards, more than 75% of cardmembers in the U.S. fail to understand properly how balance transfers actually work. Despite the fact that most of the respondents already had experience of using balance transfer credit cards, 76% of them are still confident that if they fail […]

Wednesday, December 5th, 2018

More people may find themselves on Santa’s “nice” list this year, getting all the things they wished for on their holiday list. At least, if spending forecasts are right, they will.

Wednesday, June 20th, 2018

A new co-branded card from Chase and United Airlines is offering an array of benefits, including 40,000 bonus miles when cardholders spend $2,000 in the first three months of having the card and a $100 bonus when they make their first purchase.

Wednesday, December 20th, 2017

The holidays are supposed to be a joyful time, but for many, that joy is dimmed by concerns about money. Credit card debt, in particular, can cast a shadow over holiday cheer, according to a survey by one of the United States’ leading mortgage servicer.

Tuesday, June 6th, 2017

More people than ever before are entering retirement while still carrying debt, according to data from the Federal Reserve Bank of New York. Debt held by people ages 60 and older has almost doubled, jumping from nearly 13% in 2003 to nearly 23% in 2016. The debt load among older Americans equals about $3 trillion.

Best Credit Offer
Best Credit Cards from
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 4 / 5
Horizon Card Services Group One Freedom Card
Copyright © 2001-2024 All Rights Reserved.

See the credit card's terms and conditions on the online application page. Note that this website may be compensated by credit card issuers when the visitor applies for a card through the links on this website. We do our best to maintain all information accurate and up to date. However, we do not warrant the credit card information won't change. Click the "Apply Online" button and review the current info on the secure credit card terms page.

Information in these articles is brought to you by Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles.

The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions. makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that may be compensated by the credit card issuers when the readers apply for a credit card through this site. is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. does not review or list all available financial or credit offers.

You've successfully subscribed!

Please specify the following:All these fields are optional

Thank you for providing this information! We will make sure our letters are useful for You.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.