The term ‘balance transfer’ already gives a clue as to what it is. It refers to a transfer of an outstanding balance amount from your credit card’s limit to an account within the same bank the amount is transferred from. In a balance transfer what you’re doing is you’re transferring the balance form one credit card to another credit card.
Now you may wonder, why do that? Well, there are many ways a balance transfer can help you better manage your bank accounts. One obvious reason is that a balance transfer can be one way for you to pay off your credit card bills. Aside from that, here are other benefits, according to GoBear:
First, you’re not charged any interest for the amount you loaned. There’s a small admin fee, but other than that, you don’t have to worry about having to pay so much more than the amount loaned.
Second, balance transfers are instantly approved. You can do it online, too.
Third, there’s a short period allotted for loan repayment and this good because the 6 or 12-month repayment period lets you better discipline yourself when it comes to managing your expenses.