Owning a credit card these days is more a status symbol than merely a financial need. In fact, many people even have more than one card. But if used unwisely, this could lead to serious financial hazards. While multiple cards allow you to spread out your monthly expenses, it’s important that you adhere to the individual payment deadlines that each card sets out. In case you have incurred large debts on your card/s or want to shift to one that charges a lower interest rate, you might want to consider exploring a balance transfer credit card.
What is a Balance Transfer Credit Card?
A balance transfer credit card gives you the opportunity to transfer the outstanding balance from one or more cards to a new card account. This can be beneficial if you are paying a high interest rate or a high annual maintenance fee to own that card. Also, such balance transfer cards may offer interest-free periods for a few months. This increases the value of your payments since they will go completely towards repaying the principal credit. As long as you are aware of what is a billing cycle and if you make timely payments, you can easily use this card to build your credit score.
Just as you can apply online for various credit cards, you can even find one that will allow you to transfer your existing balance on other card/s via the internet itself, without a physical visit to a bank or a financial institution. But beware, there are many scams that exist when it comes to balance transfer credit cards. You could be promised a bunch of free things and great features but eventually end up with none of them; instead, you might have to shell out much more than before accepting the card!
Here are a few points to look out for, if you want to avoid being frauded while conducting an online balance transfer:
- Make sure APR and transfer fees are disclosed: There may be many credit cards that will try to entice you by offering lower interest rates than your existing card. On websites, it’s easy to promote a particular interest rate, but only by looking closely will you find that there will be various eligibility criteria that you must meet to avail that rate. Also, certain card issuing websites may convince you that a transfer is possible. But once they receive your commitment, they inform you about a transfer fee that is levied on the outstanding amount to be transferred. It’s up to you to read all terms carefully and make sure there is clear disclosure of the APR and transfer fees (if any) on agreements between you and the card-issuer.
- Interest-free periods should be specified in writing: If the bank or a financial institution offers an introductory interest-free period, find out if this is applicable for balance transfer credit cards. Only a handful of banks offer the 0 APR period for balance transfers. It’s important to ensure that these terms are mentioned in the written contract, even if received by email. Also, if you have a question like what is a billing cycle for a card, the issuer must be able to advise clear date ranges for the same. This will help you to plan your monthly budget in advance.
- Conduct a Cost-Benefit Analysis: This is one of the most important things to do when trying to avoid fraud while exploring card options with the intent of balance transfer. The bank or financial agency may tempt you with a lower interest rate and some other exciting features, but may keep its transfer fee hidden until after you accept the agreement. It may be too late before you realise that the card doesn’t give you the actual savings benefits you hoped to gain. And you may just have burdened yourself with another debt instrument!
- Stay cautious of fake banks or financial institutions: As with any service, particularly those that involve spending your hard-earned money, you can expect to be in safe hands if you approach reliable credit card issuers. But there are many scams that operate under namesake websites of popular banks. Stay vigil of such fraud websites and read all terms proposed by any agreements between you and the firm issuing the balance transfer credit card.
You can use the above tips to try and steer clear of frauds while conducting any online balance transfers. Just make sure you do an in-depth research before you agree to anything online.
In your search for credit cards for balance transfer, Bajaj Finserv RBL Bank credit card is sure to come up. As a co-branded card, backed by a dependable bank, this credit card will meet all your requirements. With instant online approval, easy EMI conversions and other fantastic features including balance transfer, you are sure to love this card and even recommend it to others too.