What are
Balance Transfer Credit Cards?
Balance Transfer Credit Cards allow individuals in
possession of them to undertake what is known as a ‘balance transfer’ with
regard to a preexisting, outstanding credit card balance. A balance transfer
involves the movement of a balance incurred on one credit card onto a new
credit card.
Through the
undertaking of a balance transfer, the balance – ranging from a portion to the
entirety of the preexisting balance – will be transferred to the new credit
card. However, while Balance Transfer Credit Cards prove to be valuable and
economical instruments for certain individuals, associated rates, interest, and
charges should be investigated prior to engaging in balance transfers.
Standards and Practices of Credit Terms Specific
to Balance Transfer Credit Cards
In most cases, the following standards and
practices are specific to Balance Transfer Credit Cards:
Many Balance Transfer Credit Cards allow for a ‘0%
Annual Percentage Rate (APR)’ upon the approval for the receipt of these types
of credit cards. However, the absence of an interest rate exists on a temporary
basis. Periods of 0% APR will range from 6 months to a year.
Balance Transfer Credit Cards allow for these
‘grace periods’ in order to allow the individual a finite period of time to
enact repayment without the threat of additional interest. However, subsequent
to the termination of the grace period, applicable interest and APR are enacted.
Although Balance Transfer Credit Cards may offer
the absence of interest for a finite period of time, prompt, scheduled payments
are required within the grace period. In the event that a payment is late or
not furnished, many credit institutions will terminate the grace period. This
results in the reinstatement of applicable interest rates.
Balance Transfer Credit Cards: Profile and
Background
The following details are inherent within the
financial structure and legal ideology of Balance Transfer Credit Cards:
Balance Transfer Credit Card Credit APR and
Spending Limits
The credit limit typically applicable to Balance
Transfer Credit Cards may vary in accordance to the predetermined amounts
offered by the credit institution upon approval. Credit limits and histories
are typically directly proportional with the interest offered. Individuals with
higher credit scores are more apt to receive lower interest rates and higher
credit limits.
Balance Transfer Credit Cards Legality
Balance Transfer Credit Cards will typically fall
under the jurisdictions of both Finance Law and Commercial Law.
Finance Law is the legal specialty regulating and
overseeing legislation applicable to the exchange and the circulation of
monies. This takes place in both transfer activity undertaken involving hard
currency, as well as Balance Transfer Credit Cards.
Commercial Law is the legal field that enacts the
regulatory oversight of standards and practices occurring within the commercial
marketplace.
Contingency Plans in the Event a Rejected Balance
Transfer Credit Cards Application
In the event that your application for the receipt
of a Balance Transfer Credit Cards has been rejected, additional options may
exist for your consideration. You are encouraged to investigate the following
options, which may provide assistance with regard to both the receipt of a
credit card in addition to measures undertaken in order to improve your
respective credit score.
Individuals
interested in applying for credit cards are encouraged to contact legal and
financial professionals in order to better understand both the risks and
ramifications implicit within any nature of credit cards.
