Why Credit Card Providers Offer Balance Transfers
Published April 12th, 2007 in Credit Help and Tips.You may have heard about the usefulness of credit card balance transfers, or perhaps questioned why credit card providers would offer such seemingly “sweet deals” and “free money”.
But the fact of the matter is that nothing is free, and these credit card providers know exactly what their doing.
These companies crunch numbers all day and know exactly what the outcome will be if they offer a balance transfer deal. They’ve essentially hedged their bets with fees and fine print that will ensure that they come out on top.
Just as a casino knows the odds in a game of blackjack, credit card providers know the outcome of their product offerings.
There is a caveat; if you’re responsible and stay on top of your finances, you can beat the system and play the balance transfer game successfully.
But keep in mind you’ll be one of the few, as many others will get caught up paying balance transfer fees, miss a payment and lose their 0% APR, or simply forget to move their balance to a new credit card and get hit with huge finance charges.
And that’s exactly why credit card providers continue to offer what seems like “free money” or amazing deals. They are betting on you to slip up, make a mistake, and pay for it.
So be wise and keep track of your credit card use, and always read the fine print before you open a new credit card. Watch out for 0% APR credit card offers that don’t cover purchases, or hefty balance transfer fees and universal payment default.
After all, it is a game, and if you’re trying to beat the system, you need to stay sharp.
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