While having a credit card seems like a good option, it can strangle you in a debt cycle, making it almost impossible for you to get out of this fatal trap. This is where a balance transfer comes in, it can help you get out of the debt cycle, and we’ll read “how” in this article.
To put it simply, a credit transfer is the process of transferring your debt form a credit card with higher interest rate to a credit card with lower interest rate. But as simple as it seems, the process is rather delicate, and if not done correctly, can cause the debt to increase even further.
Here are some benefits of a balance transfer.
Consolidate Your Repayments
If you have multiple loans to repay, then keeping all the deadlines in your mind can be a very difficult task. Fortunately, you can easily transfer all the debt in a single balance transfer card, now you’d only have to focus on one repayment date instead of multiple ones. You can also transfer money from credit card to debit card and repay your debt with that.
Save a Lot on Interest
A major portion of all your repayments goes towards paying the interest, and the interest rate of many credit cards is very high.
But a major benefit of transferring your debt on a balance transfer card is that they usually offer a 0% interest rate to their new customers for only a limited amount of time, and you can have all your money go towards repaying the capital amount, and not the interest.
Choose a New Provider
Another reason why you might consider transferring your balance is having a bad experience with your current credit card supplier, and that might include the interest rate, or any terms that you disagree with.