Is rate arbitration possible through balance transfer method?
You can arbitrate interest rate through balance transfer method as well. In a balance transfer method, you can transfer all your balances from high-interest credit cards to a single low rate card after paying a processing fee. Thus, it allows you to lower your interest rates and save money on your unsecured debt.
Some credit card companies charge 0% interest rate on these cards during the introductory period. This period normally lasts for around 6 to 12 months. This means that you don't have to pay any interest rate during this time-period. You only have to make payments toward the outstanding balance. It is best if you can pay off your outstanding balance within the introductory period. This is because the credit card companies can double or triple the interest rates once the introductory period is over.
For example: Emma has 2 credit cards with Capital One and Chase at 15% and 20% interest rates respectively. Emma takes out a 0% interest card from Bank of America and transfers all the balance into it. The BOA pays off the outstanding balances to Capital One and Chase. Thereafter, Emma only has to make payments to BOA.