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Question By
melialy1

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Purchase as Alternative to Balance Transfer?
Hello,

I have been looking into opening a new lower-interest-rate credit card and doing a balance transfer from my old credit card. I've noticed that many credit cards out there have balance transfer fees.

I was thinking: If I open a new credit card at a lower interest rate and simply use it to pay off the balance on my old card, won't that be the same as doing a balance transfer? Wouldn't it just count as a normal everyday purchase and therefore not incur a balance transfer fee? Has anyone ever done this?

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Top Contributor
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No, it will be a balance tranfer, or a cash withdrawl.  A balance transfer is typically 3% of the amount transfered, so figure that into if you are really saving interest. Some cards also give zero interest on transferfor 12/24 months.  A cash withdrawl will almost always be a much higher interest from a credit card.

Reply by
melialy1

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Thank you for the reply! Can you clarify how it would be considered a cash withdrawl, as opposed to a normal purchase on the card? I would not be withdrawing anything or getting a cash advance.

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