What is a balance transfer on a credit card?
CZR asked:
I have a credit card from my bank can I transfer some money from my credit card to my savings account? If so is that called balance transfer or is that advanced cash?
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I have a credit card from my bank can I transfer some money from my credit card to my savings account? If so is that called balance transfer or is that advanced cash?
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August 13th, 2009 at 11:58 pm
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That would be a balance transfer, which usually comes with an extremely high interest rate.
August 14th, 2009 at 6:24 pm
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that’s a cash advance and will be at a lot higher rate than a purchase
a balance transfer is when you take the balance of an account that
has a higher rate and put it on a new card with a lower rate of interest.
August 16th, 2009 at 8:23 am
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That depends on the terms of the balance transfer. Usually it is meant to pay another credit card bill off that has a higher interest rate. They will usually have a promotional interest rate that will last 6 – 12 months, then start charging the rate on purchases (which is lower than the cash advance rate). Some will send you checks in which you can make payable to yourself under the same terms, so that you use your credit to make a purchase from someone that doesn’t accept credit cards. In addition they charge a a transaction fee of around 3% of the amount.
August 17th, 2009 at 2:19 pm
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That is advanced cash you are thinking of, the the interest rte is usually obscene PLUS they charge you an exorbitant fee: to do so….
What a balance transfer does is to transfer balances from high interest rate credit cards to lower ones.
If you had 2 credit cards–1 with a balance of 2000$ and an interest rate of 18% and you go out and get a 2nd card with no balance and a 6.9% interest rate, you would transfer that $2000 from the 18% card to the 6.9% card, which in turn would save you a small fortune in interest charges……