There are a lot of reasons why people choose to go towards the route of transferring credit card balance. For the longest time, debts have always been duplicating and multiplying because of interest.
With that, it is a very important part of financial life that individuals be allowed to get credit card balance transfer so they would feel that they are getting a new lease on their financial life and financial well being.
What exactly is credit card balance transfer, and what makes it a good kind of experience for everyone? Why is it a good option for any person who wants to have a better experience in terms of his or her finances?
First, this so-called credit card funds transfer is also known as the balance transfer. The balance transfer helps individuals manage debts by allowing them to transfer their current debt in one credit card to another new one. Before you even decide on doing a balance transfer, you should look at the pros and cons that come with the system.
What Is Credit Card Funds Transfer?
A credit card funds transfer is a credit facility. It is offered by any card company who wants to get ahead of the game and capture a little bit of the market. It is offered via your credit card.
Once you get a new one, there is an expectation that you will get a zero interest rate and start anew with your debt. Instead of paying the balloon interests, you end up paying less than if you allow the previous card company to hold on go your debt.
This one is a good thing because you are given a chance to get the maximum amount that you can charge for all of your purchases without worrying too much about possible interest rates that come with the purchase.
How does it work?
If you are familiar with the concept of a credit line, then it would be easy for you to know the concept of a credit card funds transfer. The concept of a credit card transfer allows you to convert the credit line that you currently have on an existing credit card to a new credit card in the form of cash to pay for purchases.
Imagine that you have one under Mastercard, then you want to get a new credit line in the form of a new credit card. You can choose to get a new Visa card, and you can apply for a credit card funds transfer at 0% interest. Usually, there is a small one-time processing fee for a period of 6 or 12 months that comes with it, but that is negligible.
What Are The Pros Of Getting A Credit Card Fund Transfer?
There are so many pros that come with credit card fund transfer, and they are the following:
First, they are low interest rate. The interest rate is usually lower and smaller than the ones that you are used to, all you need to do is to keep in mind that you can always have a good time with your available credit limit if you know that you have low-interest rate attached to it.
Another one is the fact that you can have access to short term funds. Whenever the need arises for short-term funds that you need to finance an item, a credit card fund transfer is one of the quickest ways of getting the funds you require. However, there are minimum monthly payments required that may need more assistance than what you expect so you should pay your debt as early as you possibly can.
On top of that, with a credit card transfer, you will eventually pay off all of your other loans and get all of the help that you need getting out of debt.
What Are The Cons That Come With Credit Card Transfer?
There are still some cons that come with any financial decision, and your credit card transfer is not one that is excepted from this decision.
First, you should still know that it is a credit facility no matter how you look at it. It is obvious for some people that even if they get the card transfer, they are not getting rid of the debt but they are just transferring it so they can get a better deal out of it.
Say, you apply for a funds transfer of $5,000 for six months, and you use it to pay your credit card bills, you do not have to worry about the balance transfer interest rate, but you should still expect that there is a need to pay the principal amount.
Another one is the fact that there are penalties when you miss the required payments. Because you are being given the flexibility of new debt and you also have to face the reality that you need to pay something monthly, you are penalized a big amount when you fail to live up to what you agreed up.
Keep in mind that a balance transfer is much like that of new debt but with lesser interest rate. If you fail to make good on your promise, you have to pay the price, and that is somewhat literally.
Finally, the amount that you borrow is deducted from your total credit limit. This one means that while you have to face the reality of your limited credit. Getting a new credit card and having your balance transferred does not mean that you are out of the woods, but it means that you are out of the high-interest rates that you have to pay.
It Is Still A Good Thing
Whatever you decide, keep in mind that your balance transfer is still a good thing. There are so many things that could go wrong in your finances, but being able to get good credit with it means that it will be easier for you to remove your debt once and for all.