Get The Most Out Of Credit Card Balance Transfer
Author: Naveen Kumar
There might be many reasons for
you to do a balance transfer of your credit card. You may either want to
transfer your balance to a card that charges lower rates of interest or consolidate
multiple payments of different credit cards. Here are a few things to
keep in mind to make the most of the balance transfer facility provided by a
credit card.
When to
use balance transfer If you have accumulated high credit card dues
and your credit card doesn’t offer EMI options to pay off the dues in parts,
consider a balance transfer to another credit card.
How
balance transfer helps Balance transfer helps you save the high
interest charged on your outstanding credit card amount. The high credit card interest
might keep piling up and after a point paying interest itself might become very
difficult i.e. you get into a debt trap. Balance transfer prevents you from
getting into such a situation and damaging your credit history that might
impact your eligibility for future loans too.
A balance transfer would not only help you pay the dues in
part but bring down the interest cost. You may get balance transfer facility
from another card, either interest free or at a very low interest rate compared
to the interest charged on the outstanding balance.
Go for
a new card If have only one credit card, look for a credit
card that offers the least costly and most convenient balance transfer options.
At the same time, ensure that you always pay the minimum dues of the existing
card to keep your credit score and credit history intact.
Figure
out the cost of balance transfer Credit cards may charge no or
low interest for balance transfer but most of them would charge a processing
fee. Calculate the net cost of both interest and processing fee before you
decide on the balance transfer to a credit card.
A credit card balance transfer can be a wise move if done
smartly and can go a long way in helping you clear your credit card dues and
save on interest.
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