Credit Card Balance Transfer - Balance Transfer Arbitrage

Balance Transfer Arbitrage

Because transferring to new credit cards often results in lowered rates, one can repeatedly make use of this process to save quite a lot of money over the years. The idea is to switch to a new credit card the moment the previous one's teaser rate has expired. There is a caveat: the credit card contract may include a clause preventing the credit card holder from transferring the balance a second time within a certain period of time. There may also be ways of extending the teaser rate or at least preventing it from disappearing prematurely. This method is often advocated by personal finance self-help sources.

To deter this type of behavior, many credit card issuers have stopped offering no fee balance transfers. Additionally, under pressure from various Federal agencies, card issuers have raised minimum payment requirements to ensure cardholders actually pay off their balances. These changes have made it less attractive to carry debt, despite any promotional APR that may be included in the offers.