Having multiple credit cards can end up being both somewhat of a blessing and somewhat of a curse. In most cases, it ends up that the cards with the highest interest rates are the ones that carry the largest balances while the ones with the lowest interest rates are the ones that go unused much of the time. Luckily, many cards allow for the balance of one to be transferred to and from other cards to make keeping your finances under control much easier than it might seem at first.

The information provided below should help you to learn more about the process of transferring balances from one card to another and assist you in making the decision as to whether or not you should transfer your balances.

Defining Balance Transfers

Balance transfers are simply the movement of all or part of the balance of one credit card to another, usually from a card with a higher interest rate or a card that is near the credit limit to one that has a lower interest rate or that is nearly or completely paid off. This allows you to avoid going over credit limits, gives cards that have been used a lot a little more use before having to begin paying down the balance, and helps you to avoid paying the higher interest rates on older cards.

How Balances are Transferred

The actual act of transferring a balance is relatively simple… the amount that is being transferred is charged to the card that the balance is being transferred to, and the corresponding amount is credited to the card that the balance is being transferred from. Some cards allow a transfer to be credited as a payment, whereas others do not… make sure that you know whether your cards allow this or not before assuming that the transfer will count as the payment that is due on your card.

The Best Time to Transfer Balances

Often the best time to transfer balances from one card to another is before the next month's balance and payment has been figured, because the lower the balance that you carry on higher-interest cards then the less interest will be charged to the card as a result. Transferring balances during promotional interest periods can also be good, allowing you to pay a much lower interest rate on the transferred balance and giving you more time to pay down the balance before the greater interest rate comes into effect.

Saving Money with Balance Transfers

One of the main advantages of balance transfers is that you can often save quite a bit of money when transferring the balances to a card with a lower interest rate. Balance transfers can help you to avoid fines associated with going over your credit limit, and by using a bit of common sense you should be able to keep your credit card debts under control and transfer the appropriate balances to enable to pay off your outstanding balances more quickly and for the lowest interest rates possible.

Balance Transfers with New Cards

When applying for a new credit card, many cards will allow you to transfer the balance from older cards as a part of the application process. This can be especially useful when done with cards that offer a low fixed rate for an introductory period, because you should be able to make quite a bit of headway in paying off the older balances at the much lower rate. Use caution, however, or you may end up with a new card that's mostly full when it reverts to its standard rate.

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