Understanding the benefits of a credit card balance transfer
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27 FEBRUARY, 2020
Looking to reduce your credit card woes and heavily incurred debt? Well, one of the best moves is to opt for a credit card balance transfer. It is a great option that will help you to reduce financial stress while also aiding in better money management. Balance transfer involves the transfer of dues with a high interest rate to another credit account that offers a better interest rate. This new account is usually opened with another financial institution.
So what are the uses of a credit card balance transfer? There are numerous advantages that this move brings and some of them include:
Payback at a lower interest rate – One of the biggest benefits and the reason behind the popularity of credit card balance transfer is the ability to payback at a lower interest rate. Getting a new credit card account with a lower interest rate is a good way to bring down the debt that you may be tackling. This move makes repayment much cheaper and easier.
Better financial management – It can be exhausting when managing the payment of several high interest credit cards. Additionally, there is a high interest rate from different accounts that can cause a quick add up in the debt. Using a balance transfer, you can consolidate your debt and manage it under one account. Apart from saving the interest amount, you can easily keep track of your payments and avoid late payment fees.
Avail of better credit terms – Does your current credit card account have unfavorable terms? These could include high service and default fees, short payback grace time and more. In such a case, it is better that you close the given credit card account. Move your balance to a card that offers better rewards and comes with much more attractive options for savings.
The process of a credit card balance transfer is very straightforward. It begins with checking the outstanding dues and charges that you may have to pay. Then go on to seek a credit card offering that has a lower interest rate. Assess all the factors such as the credit limit, the balance transfer fees and evaluate if the switch brings you value.
Once you are clear about the same, request a balance transfer.
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