Balance transfers are a fairly new concept in the financial world. They have recently become more popular because more people are getting multiple credit cards and want to transfer money between them and try and get the most value out of the resources available to them. Basically the way a balance transfer works is to have multiple credit cards with different rates on each. You can put a purchase on a credit card so that they can then transfer the balance to another card before they have to make a payment on the first credit card. Many people use this strategy to put off paying on a purchase even longer than they would be allowed with just one credit card. The interest rates are important with a balance transfer. Most credit card companies will only allow you to make a transfer from a higher rate credit card to a lower rate one.

Many people attempt to use credit card transfers as an investing strategy. The basic concept involves purchasing an asset that will be productive, like a business or stocks or any other thing that could potentially bring in money in a short amount of time. The purchase is put on the highest rate credit card at the beginning of a billing cycle and then transferred to another, lower rate card before the payment is due on the card. This can be done several times before any money is paid if there are enough cards to use, all with different interest rates and terms. Some people can effectively use this strategy to make some money quite quickly. Other people may not do as well and may lack the discipline to use cards and balance transfers only for purchases that will give a return.

There are several drawbacks that might not make this use of credit and balance transfers a good idea for all people. One of the assumptions used in applying this strategy is that you have multiple credit cards. Very few people that have 3-10 credit cards would only use them for investment purposes. It is also important to note that this is normally not a service that is offered or available with specific credit cards, like those for department stores, office supply stores, or exclusive online use. It is not always good to have many different credit cards and having too many can appear to the credit bureaus that you are relying on them for your everyday living. It may also be important to note that not all credit cards offer balance transfers without fee. Some charge high fees based on the amount of money that you transfer to or from the card. Some credit cards will only allow you to transfer a small amount and won't allow a large purchase to be transferred in its entirety.
Making a good decision about whether to use credit card transfers, whether for investing or just putting off payment, is a decision that should be made with care and only when you are using it for a good reason. Financial decisions should always be made with the ultimate goal and amount of money you will be paying over the long term in mind.