Welcome to FundooMoney, your 24X7 buddy for all your money matters. There might be many reasons for you to do a balance transfer of your credit card. When do you do it and how do you do it smartly? We will discuss them in just a moment.
Here is how you can make the most of the balance transfer facility offered by the credit cards.
When to use balance transfer If you have accumulated high credit card dues and your credit card doesn’t offer EMI options to pay the dues in part, consider a balance transfer to another credit card.
How balance transfer helps Balance transfer helps you save the high interest charged on your credit card outstanding. The high 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
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.
We hope you found this useful. What are the other things one should keep in mind during a credit card balance transfer? Please share suggestions in the comments section for others in this channel. For more such actionable personal finance information and regular uploads, subscribe to our channel. Also, visit our website, download our mobile app and stay connected with us on Instagram, Pinterest and Slideshare.
