Credit Card Balance Transfer: Check the pros and cons before transferring the balance from one card to another

financialexpress.com:

A credit card balance transfer involves moving the outstanding balance from one credit card to another, usually to take advantage of lower interest rates. Credit card balance transfers can help in managing high-interest debt more effectively by consolidating it onto a single card with a lower interest rate, potentially saving money on interest payments.

However, it’s crucial to consider the transfer fees, if any, and your ability to pay off the debt within the specified period to maximise benefits. Balance transfers on credit cards in India can be advantageous, but they also come with some drawbacks. Let’s explore the pros and cons:

PROS OF BALANCE TRANSFERS:

A balance transfer on credit cards involves shifting the outstanding amount from one card to another. This action settles the debt on the initial card while creating an equivalent owed amount on the new credit card. An individual may opt for a balance transfer primarily due to the other card’s proposition of lower interest rates, making it more cost-effective to repay the debt using the new card.

Also Read: Debt consolidation can help you clear your debts, but consider these key factors

It allows consolidating multiple credit card debts into one, simplifying repayment. Managing a single payment reduces the hassle of tracking multiple due dates and varying interest rates.

Adhil Shetty, CEO, Bankbazaar.com, says, “Opting for a balance transfer when managing debts across multiple credit cards can simplify your financial obligations. It eliminates the hassle of managing various payments on different dates throughout the month. Instead, you’ll only need to handle a single monthly payment, streamlining your financial responsibilities.”

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