Credit card balance transfer: Here’s what you should know before using it

Credit card balance transfer could come to your rescue when you are not able to pay hefty credit card bills. Many banks are offering credit card balance transfer facility and if you hold multiple cards, you can easily avail this option. However, you should better understand the nuances of credit card balance transfers and evaluate your repayment capability before availing this service offered by your card issuer.

Credit card balance transfer is a financial tool that allows individuals to transfer their outstanding balances from one credit card to another. It can be an effective strategy to manage debt and save on interest payments. If you are unable to clear the total credit card bill amount within the due date you can avail the balance transfer facility from another credit card. But, it’s important to note that you can only avail the facility if you hold at least two credit cards and the card issuer offers this service.

The advantage of availing balance transfer facility is that you can avoid late fee charges and additional interest charges on the existing credit card bill.

However, before considering a balance transfer, it is important to understand how it works and evaluate whether it is the right option or not.  

One of the key advantages of a balance transfer is the potential to reduce the interest paid on the outstanding balance. By transferring to a credit card with a lower interest rate, individuals can save money on interest charges. This can be particularly beneficial for individuals with high-interest credit card debt.

The major consideration before opting for a balance transfer is to first assess your creditworthiness, as approval for a new credit card with favourable terms will depend on your credit score. Additionally, evaluate the balance transfer fee, the length of the promotional period, and the standard interest rate that will apply after the promotional period ends. Also, thoroughly check the hidden charges, if any, before opting for balance transfer.  

Credit card balance transfers can be a useful tool for individuals looking to manage their debt and save on interest payments. It’s advisable to carefully evaluate the terms and conditions, fees, and one’s ability to repay the debt.