Well it’s not such a stupid question you know, some people really need to know this sort of stuff, and there are plenty of you out there who won’t be entirely sure how it all works out when you try to tranfer the balance of one credit card to another…
When you have a credit card you work up the balance of course, and if you’re sensible you’ll allow yourself plenty of room to pay off the balance at the end of each month. But if you don’t manage that of course, you can always transfer the balance. This is quite literally moving all that owe one credit card over to another credit card, and it’s as simple as that really.
What happens is that the interest you have been paying on your initial credit card stops being paid because you no longer owe them any money. Essentially your new credit card pays your bill for you (buys your debt). You will have chosen a credit card that offers you 0% interest on balance transfers hopefully, and this means exactly what it says, you pay nothing on what you owe. However, this is usually only for a certain amount of time, and after this time has elapsed you will be liable to begin paying interest again, just the same as you did when you first got a credit card.
This is why you must always go for a 0% balance transfer credit card that doesn’t have a higher standard interest than the card you’re transferring you balance from. Be careful!
Tags: 0% interest on balance transfers, balance transfer, compare balance transfer credit cards