Raking up a towering debt on your credit card? Tired of playing catch-up with the excessive financial charges imposed on your unsettled balance? You may wish to consider taking up a balance transfer programme, which should significantly lower the interest you are paying on the existing balance on your card.
What is it?
The programme provides a way to transfer the balance (i.e. the amount of money you owe) on your existing credit card account to a new account with another bank (or credit card company).
Advantages of undertaking the programme
Lower interest rate
Card issuers actively encourage balance transfers as a way to attract customers to “switch over” from their competitors. To do so, they usually offer lower interest rate compared to the one imposed by your existing card company. To put it simply, you’ll be paying less over the long run.
Zero interest period
Many card providers reward newly switched over customers with Zero Interest Period (i.e. your outstanding balance does not incur interest at all for a predetermined period). Depending on the companies that you choose, the period can last for a few months, or even up to a few years.
Consolidation of multiple accounts
Those who own multiple cards, this process allows you to consolidate all your accounts into one single account. You’ll no longer need to remember different repayment due dates and unique clauses of each and every one of your cards, which really does go a long way in helping you to manage your credit.
Manage your debt
Through the process of seeking the most favourable interest rate to choosing a repayment plan that fits your requirements, the process literally forces you to re-examine the state of your credit. If you are presently at a loss of how you can repay the balance you’ve accumulated over the years, this process may just be the catalyst you need to help you kick-start things.
Find out how much you can save with balance transfer.
Love this article? You might also want to read a more in-depth explanation on what you should know about balance transfer credit cards.
