How do CC Balance Transfers work exactly?

[jackX1]

Hello.

I am wondering how credit card balance transfers work exactly....

I got a Chase credit card with a promotional 0% APR balance transfer. Does that mean I can transfer over the balance from any of my credit cards and can pay Chase the minimum or however much without any interest or fees until the promotional period is over?

Also would I lose points/rewards from the other credit card company (I'm thinking about transferring from AMX) by doing a balance transfer instead of paying them?

Also are there any hidden cons or disadvantages about balance transfers that I missed?

Thanks!!

[safari]

Usually there is a 3% balance transfer fee. For example, if you transfer $1000, you will be charged $30. Make sure you read the fine print. You won't lose any rewards on the other card.

[jackX1]

Oh I see, that fee must be in the fine print somewhere.

Would I need to initiate the transfer from the old credit card or the new credit card? Which agreement should I find it in and would need to pay this fee?

Thanks again.

[safari]

Oh I see, that fee must be in the fine print somewhere.

Would I need to initiate the transfer from the old credit card or the new credit card? Which agreement should I find it in and would need to pay this fee?

Thanks again.

The card that offers the balance transfer is the one that charges the fee. Balance transfer has to be initiated from the new card. In simple terms, balance transfer is you authorizing the new card to send a payment on your behalf to the old card. For the old card it doesn't matter where the payment comes from, either from you directly or from another card - they treat as a regular payment.

[Like2Plan]

Also are there any hidden cons or disadvantages about balance transfers that I missed?

Thanks!!

The biggest con is the 3% transfer fee.

Then, the next thing you have to be careful of is whether there is a minimum monthy payment amount (I think with Chase there is). If you don't pay the monthly minimum, you lose the 0% interest rate. The interest rate they charge you could be higher than what you are paying now.

After that, you have to be really careful because if you use the card for anything else and you don't calculate your payment corrrectly, you might end up paying interest on the entire amount. I think with Chase--you would have to pay the mimimum payment plus any new charges in order to maintain the 0% on the transferred amount. (You have to read the fine print very carefully to figure out how they work it).

[Paladin26]

They can be great, just be careful and read the fine print. I have used mine many times wisely to keep me from getting a loan. Paid them off in 6 months and was all the better. Like above just make sure you know you have the 3% and watch your minimal payment (if there is one).

[jackX1]

Thanks for the informative replies.

It appears "balance transfers" can only be done in a limited time? I was thinking a balance transfer is a feature like transferring money from one account to another.

I logged into Chase to see how the screen looks like, I clicked balance transfer and it says 'Balance transfers aren't available for your account at this time.'

I had the account for two months so far no where near six.

I sent CS a email to see what they say, and will call them tonight if needed.

[dannin]

One other small thing to keep in mind is that generally if you already have a balance on your card at say 12% interest, then any payment towards principal will go towards the 0% first leaving first balance acruing at the 12% until the 0% balance in paid off in full.

Something else to find out is what the 0% balance will revert to once the promotional period is over. Make sure that you are paying at the cash advance rate or something similar if you aren't able to pay the balance off by the time the promotional time is over.