Some people have mixed understanding of the rules when it comes to balance transfers, as apparently in the Dodd-Frank regulations they were attempting to deal with a rather sneaky Credit Card rule, but as of today, 2/12/2014 those dastardly credit card companies are still trying to trap balance transfer people with a very sneaky rule.
If you transfer a balance onto a card, in order to capture the interest free period, the card is loaded with a balance that has no interest. This can come at a transfer fee of 2-4% but the period of interest free, ranging from 12-21 months typically makes this a good deal. However, this card is now ‘untouchable’ because any charges that you put on the card will incur interest at the regular rate, and the interest free balance will act as a firewall, meaning that you have to pay this down first, then you can start attacking the new purchase balance.
In the meantime, what that means is the money you transferred in which was supposed to help your finances, is actually preventing you from paying off a charge that is incurring interest at the regular rate. I have heard many things to say that this shouldn’t be happening, but my friendly offer from Chase this morning said exactly that.
So, whilst it may not be proper, or may not be right, or whatnot, it is clearly still the view of Chase in this case that they will be charging you interest on any new purchases when you have made a balance transfer, and you need to pay it off in full every month in order to avoid that. Therefore, if, for whatever reason you decide to complete a balance transfer, lock that card up and do not touch it, because drawing it out of your wallet and making a single purchase by mistake will start interest ticking on that purchase that you cannot stop accruing without first paying down the balance in full.