The burden of debt can be very distressful for anyone. Now, if you take loans aside, then the major reason for the debt in most people are credit card debts. Often, it is seen that people start using their credit cards more than they should. As a result, they end up having a bulk heavy amount that certainly becomes quite difficult to manage. And, the high-interest rate that comes with credit cards makes it even more challenging to repay.
Fortunately, there is a solid way to get rid of your credit cards i.e. using the option of the balance transfer. Now, this is the process where you can shift your debt from one card to another that comes with lesser or zero interest. This can help you greatly in repaying your old debt faster and without causing any inconvenience.
Benefits of balance transfer
Going with the option of balance transfer when you are dealing with massive debt can provide several benefits such as:
- Easy and direct option to get rid of your debt
- debt consolidation feature
- Pay lesser interest
- Repetitive transfer option
Balance transfer of credit cards: How does it work?
Yes, it is indeed true that the option of a credit card can actually help you kill your past debts. But, if you are transferring your debt to a new card; pay the debt within the interest-free period.
To understand this, suppose you have a credit card debt with an interest rate of 15%, it can difficult to cope up with to make the repayment. Now, if you are transferring your debt to a new card with a 0% interest rate, then it will be comparatively easier and more convenient to pay it.
But, if you are going for the 0% balance transfer credit cards, then make sure that you pay the debt within the free interest time period. Delaying the payment can result in a penalty and you will have to again borrow money for that hefty amount so you can go for Debt consolidation loans for bad credit in UK.
Take care of the fees
Opting for the bank transfer can help you save a lot of money in the end, provided that you clear the payment within the given period. Also, there is a possibility that you might have to provide a fee for the transfer. So, if you want to transfer £5000 to a new credit card, then you could be charged roughly with 4-5% of the total amount i.e. somewhere around £200-£250.
But, there are certain options available in the market where you can get complete 0 balance transfer with no fee. For that, you will have to do extensive research on the market and search for the provider who specialises in such offers.
Tips to keep in mind when using credit card balance transfers
Transferring your balance from a high-interest credit card to a lower-interest card can be extremely useful, but, you must use it in the right way. Here, in this blog, we have mentioned useful tips that can help you make the most of your balance transfer. Now, let us get started.
Tip#1:- Know exactly how much you owe
The first thing that you need to do is to check the latest statement of the card before making the actual transfer. Make sure that you have included the last purchase that you made with your credit card as this will help you know how much exactly debt you are about to transfer.
Tip#2:- Watch out for your credit score
Now, most of the card issuers take credit card score before approving for the transfer. So, moving your card with a poor credit score might not be easy. Still, there are few providers like Credit One, Indigo, and Capital One who provide balance transfer credit cards even for bad credit scorer.
However, it is advised that if you are struggling with your credit rating, then you could take Very Bad credit Loans no guarantor no broker and repay it timely to boost your score within time. This will help you avail any financial products easily in the future.
Tip#3:- End your old account
Now, while going to the new card for the transfer, you must close your old account. The reason is that even with a zero balance will be taken into account during the preparation of your credit report.
Wrapping up, these were pretty much everything that you must know about the balance transfer of credit cards before making a final decision. The more you will know about it, the better you will be able to use it for your benefit.