A balance transfer is when you transfer your balance from one credit card to another, presumably to take advantage of lower rates. Some credit cards will write you a check for the amount, rather than having you jump through the hoops of paying another credit card company.
Why do credit cards offer balance transfers? Credit cards are in a constant battle to get a “share of your wallet.” They want to get into your wallet so that you’ll be more likely to use them when you make purchases, so all the cash back offers and reward programs exist to gain a piece of that share. They earn a percentage off each transaction, so having a large share is crucial to their business.
They have balance transfer offers because they know the longer you have the card, the more likely you are to use it. If you have a balance on your card, they’re playing the odds and thinking that you probably won’t be paying off that balance for a few months. Those are precious months they can sit in your wallet.
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