History Of Balance Transfer
To know about the history of balance transfer we need to know more about credit cards first
. Balance transfers and credit cards are intertwined with each other that it is almost impossible for them to be separated. In fact, because of credit cards the idea of balance transfer became available.
The first modern use of credit cards began in the United States when establishments such as hotels and oil companies began giving them to customers. These customers could then avail of the services of these establishments by using the card and paying for it on a later date. The idea soon picked up and fast forward to the present date, millions of people all over the world are now using credit cards.
The convenience of making purchases and using credit cards in emergencies is its main advantage. People who want to make purchases simply have to swipe in their cards and they can immediately have the item. Unfortunately, most people who own credit cards have this compulsion to spend. We sometimes pile in a large debt that when our monthly bill comes in we have a hard time in paying it. Before we know it our debt would soon balloon to a huge amount that it would take a long time for us to pay it back due to the huge interests involved.
Due to the ingenious idea of most people in debt, they soon discovered that they could use their other credit cards to pay off their credit card debt. What they did was to make cash advances on their credit cards with low interest rates and used this to pay their credit cards with a higher interest rate. This process helped people extend their good credit rating for a couple of months. Although a bit crude, this process became the first ever
balance transfer.
Banks began to become aware of this process and began introducing balance transfer features on their credit cards to boost up their business. The first introduction of this feature was never really popular since people were already doing this before the banks introduced it. One other reason why it wasnt successful was that people at first never really had any use for balance transfers.
Balance transfers became popular just recently due to the economic crisis the world is experiencing. Faced with a large debt and overspending many people soon had a hard time in paying their credit bills. One way to effectively recover from
credit carddebt was to avail of balance transfers. By transferring the outstanding balance of your credit card to one that offers a 0% interest rate you can make a huge savings and can lower your debt in the long run.
Today, many banks offer various balance transfer promos to draw in more business. We now have various options to choose from to help us in managing our credit card debt. Balance transfers are here to stay and will become an important feature in most credit cards in the future as well.
by: john pananmae
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