Summary of this article
Managing multiple credit cards can quietly get overwhelming.
Balance transfer facility is offered by most nationalized banks as well as other financial institutions that issue credit cards.
By transferring your credit card balance to a new credit card, you are able to maintain a good payment record which reflects positively on your credit worthiness over time.
Credit cards allow you to spend money with ease. However, managing your dues is not that simple at all. With some of the highest interest rates on outstanding dues in retail finance, every unattended penny you owe to your card can quickly pile up into thousands of rupees in debt.
Managing multiple credit cards can quietly get overwhelming. You tell yourself you’ll handle it - pay a little on each card, keep things under control - but the balances don’t really shrink. Meanwhile, interest keeps building from the very first day, making it harder to get ahead.
“If you’ve been in that spot, chances are you’ve heard about credit card balance transfers. It’s often presented as an easy fix: move what you owe to another card with a lower interest rate or better repayment terms. In some cases, that shift can genuinely ease the pressure and reduce how much you pay in interest,” says Adhil Shetty, CEO, Bankbazaar.com.
But it’s not a one-size-fits-all solution. Before making the move, it’s important to understand how a balance transfer works - and whether it will truly work in your favour.
Balance transfer facility is offered by most nationalized banks as well as other financial institutions that issue credit cards. Depending on your bank or credit card issuer, the terms and conditions may differ from one provider to another. Visit your bank or credit card issuer’s official website to know more about their credit card balance transfer policies and the charges they levy.
In order to transfer your credit card balance, you must apply for a new credit card as a user. Once you have been approved and dispatched your new credit card, you can request for a balance transfer of your old credit card to be redirected to your new credit card. Your bank will then proceed to pay off your previous card balance to the old card issuer, thus transferring the due to your new credit card.
Simply by transferring your balance to another credit card with lower interest rates, you can lower the interest you have to pay back. However, credit card companies tend to levy processing fees or other charges when you request for a balance transfer. Keep these charges in mind while considering a balance transfer as they may or may not work in your favour.
Some credit card issuers charge a balance transfer fee that can range from 1-3 per cent of the amount being transferred. You need to assess if you would save more on interest by switching to your new credit card. Also look out for any annual fees or other charges that the new credit card company may levy. Doing so will help you accurately calculate if you will end up saving money by switching cards.
Credit card balance transfer also allows cardholders better flexibility when it comes to clearing their dues. Instead of having multiple credit cards with outstanding balances on each, users can transfer all their balances to one credit card. Not only does this make it easier to keep track of your dues but also allows you to focus on repaying a single credit card rather than multiple ones. This also comes in handy when you’re anxious about missing out on a payment or credit card due date.
A balance transfer may also help you increase your credit score. By transferring your credit card balance to a new credit card, you are able to maintain a good payment record which reflects positively on your credit worthiness over time.
It is also important to note that users should not rush into getting a credit card balance transfer. Take the time to understand the terms and conditions of your new credit card. Consider your financial position and determine if you will be able to make payments and clear your card balance in the stipulated time period.
Credit cardholders can use this service to shift their dues from one card to another card which has lower interest rates or flexible repayment benefits. By transferring your card balance, you may be able to save money on interest as well as manage your debt from multiple cards on a single card.
