Should You Use a Balance Transfer Credit Card

credit cardsBalance transfer, or the act of transferring one credit card balance to another credit card, is so enticing to many people nowadays, especially when the one you’re moving the balance into has lower interest rate. However, there are certain terms and conditions that apply to this move, and more often than not, the process ends up more complicated than what one would normally imagine. If you are thinking of doing the same, you may want to read up on the pros and cons of doing so, just to be enlightened about the consequences which you may be facing when you do.

Advantages of Balance Transfer
Balance transfer comes with its own benefits, and these benefits are oftentimes enough to convince credit card holders to try and do the process.
For instance, a balance transfer can help you to save on money – a significant amount of that in particular, provided that you make choices wisely. There are many credit cards which offer zero percent interest for the first month or first few months, which means you’d be paying no or a minimal amount of interest if ever. However, you need to make sure that you read the terms and conditions well because even if the first few months are free, the succeeding ones may charge a pretty hefty amount. Aside from the zero interest rate promotion and succeeding month’s charges, you should also look at the grace period and make sure that it is long enough for your convenience.

Disadvantages of Balance Transfer
One of the hassles of a balance transfer is that it can be pretty difficult to make yourself eligible for one, especially if you have bad credit standings. If you have bad standings, you may still be able to qualify for one, but you can be sure it won’t be for higher level credit cards or those from bigger and more reputable banks or credit card issuers. In addition, balance transfers are not free, especially if the credit card you plan to transfer the balance to has an annual fee, and add that to the usual three or four percent transfer fee, that could easily add up to a significant amount of cash you need to shell out.
Balance transfers may sound like a good move to make, but not if you didn’t understand the terms and conditions that apply to it. Thus, before making this move, be sure to acquaint yourself with the process and all other things that concern it in order to fully take advantage of its benefits.

Leave a Reply