Credit cards have now become an integral part of life. They are the most convenient way to make purchases not only in supermarkets and malls, but also from online stores. In addition to being the easy way to make purchases, credit cards also serve another very useful purpose. You can consider opting for balance transfers on your credit cards to help you reduce your financial burden. This is a boon to innumerable people who are having multiple credit cards and reeling under large debts.
With many banks and financial institutions throwing in some great promotional offers for people opting for balance transfers, there is no way you can resist these offers. However, it is important not to fall for it hook, line and sinker before considering various important factors. Let us take a look at a few points that you need to take into consideration before opting for balance transfers.
Most often than not, people would like to transfer their balances from one credit card to the other because of the current rate of interest on the card that has pending dues. It is no point if you opt for credit cards that have a high rate of interest again. In order to avoid this, look out for cards that have promotional offers on them. Thanks to the highly competitive environment in this sector, a lot of banks have some interesting offers to lure newer customers.
The time period for the offer also makes a difference. Opt for balance transfer on the credit card that is willing to offer you the longest promotional period so you can enjoy better benefits for a longer time. Once the promotional period elapses, the normal APR comes into play thus pulling down the benefits. You can overcome this by opting for cards with longest promotional period.
Another important to factor to consider before choosing the right card for balance transfer is the cost involved. Some banks proclaim that they have the lowest interest rate, but they make up for the loss by having various fees like administration fees, processing charges, balance transfer charges and many more. Hence, take all these costs into consideration and compare them with the current card and the balance on it. If the total exceeds the current balance, then, it makes no sense to opt for transfers on such cards.
Balance transfer on credit cards is a good move only if it is a well planned and informed decision. Make sure you consider all aspects before going in for one.