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Balance transfer credit card offers most usually involve no interest payments on balance transfers for an initial period. This period might be a year or a different length of time. This article will tell you all about the advantages of this type of offer.
This type of offer can be used in two main ways. The first way is to save paying interest on existing borrowing. The second way this type of offer can be used is to actually make money, although this is less common, it is still an easy and legitimate option for many people.
To use this option to save paying interest on existing loans, one needs to transfer the balances of the existing loans to the new credit card. This means that no interest is charged at all for the initial period, and this means that repayments can be used to pay down the balance, rather than just keeping up with the interest repayment and making no real progress. This option can be of considerable value if used sensibly.
The method of making money with this offer is to use the available funds to invest. The safest form of investment is probably a high-interest bank account. All the interest received is pure profit, and the balance can be repaid just before the interest on the card starts becoming due. This method is sometimes used in other forms of investment, although it is vital that the risk is taken into account.
Investing in a new business using this method is sometimes done, but is extremely risky. Statistics show that more than 90% of new business ventures fail, so the risk is extreme, even though the profits can also be huge when the business is successful. Examples of this approach include the movie "Clerks", and, it is rumored, the Google company.
Other investment types which could be funded in this way include promissory notes which typically deliver 12% interest, or stocks, commodities or currencies, which carry a considerable risk since relatively small investors usually lose to the major players.
Balance transfer credit card offers can be extremely valuable if used wisely, but be careful to be aware of the real levels of risk, and also to consider other factors about the card in question.
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