One of the main reasons for people to switch from one credit card lender to the other is because they would like to opt for the balance transfer on the card that has maximum amount due. While balance transfers on credit cards are a great option, things can go wrong if you don`t make a well informed decision. The terms and conditions associated with balance transfers on credit cards and tougher and you might end up from the frying pan into the fire if you don`t choose the right credit card to which you would like to transfer the balance. If done right, there are a number of advantages that come with the territory. However, there are also some drawbacks that you may want to consider.
Advantages of opting for balance transfers on credit cards
First of all, opting for this gives you the benefit of availing lesser interest rates and reducing your existing balance thus giving you the option of clearing off your dues faster. If you have a huge balance on a credit card
that charges a high interest rate and has innumerable fees being levied, then, it is time you considered another card with much favorable terms and made the switch. Clearing off the balance soon will ultimately lead to a better credit score.
There are a number of cards that offer very small grace period. In such cases, the interest starts accumulating fast thus increasing your financial burden. Transferring this balance to another card which has a longer grace period coupled with other favorable features can prove to be beneficial to you.
The biggest benefit of balance transfers
on credit cards is that it gives you the option of bringing together all your dues on multiple credit cards under one umbrella. Most often than not, people with multiple credit cards, end up paying various banks varying interest rates on the balances due thus losing money hand over fist. However, consolidating all the balances due on those cards and opting for the right card and going in for balance transfer
on that card will save you a lot of dollars.
Drawbacks you will need to consider
If you don't choose the credit card on which you would like to opt for the balance transfer wisely, you can calling for trouble. Most often than not, people just do their balance transfer in haste and then realize their folly. However, by then it will be too late! Look out for credit cards that have promotional rates on balance transfers and opt for them.
There is a balance transfer fee, processing fee and many other fees associated when you opt for balance transfer from one card to the other. Find out about all the charges that are applicable in your case. Do not go ahead with the transfer until you have weighed all the options and have decided that the balance transfer is the most favorable for you despite all the costs involved.