How Balance Transfer Credit Card Works and Can Boost Your Finances
Balance transfer credit card is the term for moving of the debt to another finance institution. The debt is transfer to save money with a lower rate of interest. Lower rate of interest means you will have to pay lower amounts and thus save some money. It can also be seen as using another credit card to pay off your previous credit card debts. But with the terms and conditions being in favor of you.
There are some finance institutions in UAE that offer the zero Annual percentage rate for a limited period of time. Always look for credit cards that have no annual percentage rate for the first year. More importantly, always pay your bill on time. Some finance institutions don’t charge monthly interest as long as you pay the bill on time. Being late for the payment of your credit card bill would only add to your debt. If you are repeatedly late in paying your credit card bill, your interest rates will hike up too.
Note: Balance transfer doesn’t get rid of your credit card debt, it only lessens your burden.
How do Balance Transfer Credit Card Work
If you want to transfer the balance of your credit card, it is very easy to accomplish. Nowadays, every financial institution on in UAE is willing to provide a balance transfer of the credit card debt. But with availability comes opportunity. An opportunity for the card members wallowing in debt. As there is no shortage of financial institutions providing balance transfer offers to the customers, better terms and conditions have started popping up too.
- Balance Transfer Fee- The financial institution won’t charge an annual percentage rate for a limited period of time. Although, you will be charged a balance transfer The balance transfer fee will be a percentage of the transfer amount. The minimum fee of the balance transfer fee is AED 300.
- Annual Percentage Rate- There are some financial institutions that charge zero AED as an annual percentage rate for a limited period of time. But after the free period for Annual percentage rate is over, you will be charged a certain amount by the financial institutions.
Types of Balance you can Transfer
You can transfer credit card debt, auto loans, personal loan, school loan, installment loan, etc.
How to Do the Balance Transfer
The balance transfer process is quite easy.
To transfer the balance of your credit card debt,
- You need to research for the financial company that would provide you with the best conditions.
- Check the credit limit of the credit card. Additionally, ask the financial company if there is any limit on the Balance Transfer as some companies do have a limit on the balance transfer amount.
- Understand the fees and charges of the credit card. If you don’t want to end up with surprise charges at the end of the billing, read the terms and conditions thoroughly. Zero annual percentage rate might attract you instantly. But be careful with the terms and conditions.
- Deciding the amount to transfer is very important too.
- After you have decided where to transfer the balance amount to and how much to transfer, finish the job. Complete the transfer.
- You can now pay back your credit card debt without any hefty charges lingering above your head.
Boost your Finances
When you transfer the balance of your credit card, you get better chances of saving up. With lower interest rates, you have a lesser amount to pay back to the financial institutions. If you pay the bill on time, you will save up on late fees and higher interest rates too. All these factors can help increase your savings and lower your burden.
Best Balance Transfer Credit Cards in UAE are
- Citibank Citi Simplicity Card
- ADIB cashback Visa Platinum card
- Standard Chartered Titanium Card
- HSBC Platinum Select Card
- RAKBANK Red MasterCard Credit Card
The prospect of balance transfer might seem daunting but if researched carefully, it can be of great help to you. Even after the transfer is done, negligence should not be a part of the bill payment. Always pay your credit card on time. Late payments can incur a higher interest rate which will affect your debt automatically. Being prudent with your bill will help you pay off the debt sooner.