subject: Balance Transfer Credit Cards [print this page] If you are one of the millions of consumers in the United States chances are, you know what a charge card is. However, for those of you who are not quite acclimated to the charge card industry, charge cards are plastic cards that are issued to consumers by banks. These plastic cards have a magnetic strip that contains information attaching the credit card to the account holder. When people use credit cards for purchases, the purchase totals will be added to the total amount due to the bank by the consumer. The banks make money off of the credit cards by adding an annual percentage rate and annual fees to be paid by consumers. However, lately the big credit card hype has been about balance transfer charge cards.
Balance transfer charge cards work just like regular charge cards. Consumers can apply for these accounts and if approved, they will receive a balance transfer charge card that they can now not only use for purchases but now for other balances owed. There are several benefits to balance transfer charge cards adversely, there are a few things that people should beware of when looking into a new balance transfer credit card.
Benefits of balance transfer credit cards:
Promotional interest rates: Because of the overwhelming amount of competition in the charge card industry, banks that offer balance transfer charge cards have been lead into offering a introductory annual percentage rate. Promotional interest rates are low interest rates that start the day the consumers open the credit card accounts to the end of the promotional periods (usually between 6 and 18 months). In most cases, these introductory interest rates are 0% which really gives Americans a bit of leverage for the first few months of opening the balance transfer credit card account.
Rewards: Another great benefit to having a balance transfer charge card is the rewards offered. Remember above where I mentioned that overwhelming competition in the charge card industry forcing banks to offer lower interest rates? Well, it's this same competition that has brought about rewards in the charge card industry. Because just giving consumers a lower annual percentage rate wasn't enough to attract enough consumers to charge card products, several banks have decided to incorporate rewards programs into their balance transfer charge card products. Fortunately, many of these banks offer a wide variety of rewards that allow Americans to maximize on the benefits provided through their credit cards.
Beware of:
Annual fees: Because balance transfer credit cards offer so much to consumers by way of low interest rates and rewards, the annual fees for these types of credit cards will generally be a bit higher. Before people apply for new balance transfer credit cards, it's important that they are aware of and agree to the annual fees involved.
Interest rate: Several consumers who research balance transfers are getting trapped by a low promotional interest rate without looking at the future annual percentage rate for the charge card. Before Americans apply for any new credit card, they should be aware of all interest rates associated with the credit card including introductory interest rates, balance transfer interest rates, cash advance interest rates, purchase interest rates, ect...
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