6 Things you Should Know about Balance Transfer Credit Cards
Credit cards that come with zero interest rates are the ideal solutions for cardholders looking forward to paying their outstanding debts with a high-interest rate. These credit cards not only help you to repay your debt at a faster rate but also maximize your savings via interest, along with improving your credit score.
Before you go ahead and make any decision of transferring your credit card balance to 0% APR cards there are various important factors that are to be kept in consideration. Very often people who are trying to reduce their outstanding credit card debts turn to zero interest balance transfer credit cards without realizing and analyzing the various pitfalls.
If you are battling with credit card debt and want to repay your outstanding financial obligations with the help of balance transfer credit cards this quick read will help you to make a better decision. In this thread, we will shed light on some of the most important things that you should know about balance transfer credit cards in the UAE. Furthermore, we will be sharing some useful tips and tricks that will help you to quickly repay your debts using balance transfer credit cards in the UAE.
Potential to Save Money
The first and foremost benefit of opting for balance transfer credit cards is that it allows that cardholder to save a considerable amount of money. Balance transfer credit cards that come with zero rates of interest are the best financial tool when it comes to saving money, however, cards that come with a low rate of interest will also help you to save money if the rate of interest applicable to your credit card is quite high.
In order to explain how balance transfer credit cards that come with zero interest rate save money let us consider an exemplary situation. If you have an outstanding debt of AED 10000 and you are paying an interest rate of 15% annually, then with the help of zero interest balance transfer credit cards you will end up saving AED 1500 over the course of the entire year.
Escape Debt Traps Faster
If you own a credit card you’re most likely paying for the privilege of having that card in your wallet along with the fact that you can carry balance overtime. The convenience that you experience with your credit card does not come for free. The rate of interest that is being charged on the credit card is the bank’s strategy of making a profit-.
When you transfer your outstanding credit card debts to zero interest balance transfer credit cards you can escape the trap of debt quickly. In case of zero interest balance transfer credit cards, the entire amount that you pay goes towards the principal and not the interest, which will help you in order to become debt-free at a faster pace.
Consolidating your credit card payments using zero interest balance transfer credit cards will allow you to save money which can be used to make extra payments on your outstanding debt. Using this strategy cardholders can become debt-free really quickly.
Additional Credit Card Benefits
One of the major advantages of opting for balance transfer credit cards is that one can apply for credit cards that offer rewards and perks for spending money. Various credit cards come with special offers and perks for their customers which are quite beneficial.
For example, airmile credit cards, travel credit cards, and reward credit cards all offer a heavy discount on hotels and flight bookings. If you have a simple credit card that comes with no perks and benefits finding a balance transfer credit card that comes with a plethora of benefits is worth considering.
Simplify your Finances
Another major benefit of using balance transfer credit cards is that it helps in maintaining structured and order finances. Instead of making different payments to different credit card companies opting for one credit card where all the payment is consolidated is a more manageable and easier way. Using this strategy all you need to worry about is paperwork and consolidating payments into a single account.
You’ll Pay a Fee
An important point to be kept in consideration while discussing balance transfer credit cards is that these cards are not for free. In most cases, cardholders are supposed to pay a fee in the form of the balance transfer fee. Typically, the payable fee is based on the total amount that is being transferred. Usually, the balance transfer fee varies from 2% to 5%.
Everyone Does not Qualify
A major drawback in the case of zero interest balance transfer credit cards is that everyone does not qualify for these cards. Typically, people who qualify for balance transfer credit cards have high credit scores. If you are somebody who is struggling with credit score then it is very unlikely that you will qualify for these cards.
In a Nutshell
Balance transfer credit cards are quite useful. Cardholders should be aware of all the terms and conditions beforehand. The key to using balance transfer credit cards is to strategically decrease the debt.