Here is a way out which will give you more time to pay off the dues and also get rid of your current credit card. Balance transfer facility is the answer.
What is balance transfer?
It is facility offered by credit card issuing companies to card holders wherein the outstanding balance on the credit card can be transferred to a less used card or a new card.
Banks provide incentive for customers who use balance transfer by providing a low interest or interest free period.
When an individual opts for balance transfer, the less used card or the new card from which the facility is being used will lower the credit limit proportionately to the balance transfer amount.
When is it useful?
High interest rate charged: If individuals face a situation where the interest rate charged by a new credit card is lower than what is charged by the current credit card, interest cost could be reduced by transferring the outstanding balance to the new credit card.
Dissatisfied with the service: For those individuals, who are not content with the service provided by the current credit card company, due to various issues can opt for balance transfer.
The individual can transfer the balance of such a card to another card and get rid of the old card.
Inability to finance the debt: If an individual has a high outstanding balance on a card and is unable to finance it currently because of short term liquidity crunch, or if the individual has an exorbitant debt to pay off, balance transfer can come as a temporary relief.
Charges involved
In order to induce customers, banks offer low rate of interest or sometimes even zero interest on balance transfer for around specified period.
What is noteworthy is the fact that these attractive rates (zero or low rates) are valid for only an introductory period i.e. 3-6 months, post which the bank will start charging you the normal rate of interest.
The process
Inform the credit card company to whom you would want your outstanding debt to be transferred to.
Fill in the form provided by them with details pertaining to your old credit card along with a copy of your latest credit card bill and submit it.
More importantly, note that moving from one card to another provides you with temporary interest relief. Also, do remember any purchases and expenses on the card on which you have opted for balance of transfer will not fall under the low or zero interest purview.
Source: http://www.rediff.com/business
Follow us : www.facebook.com/karvyprivatewealth
What is balance transfer?
It is facility offered by credit card issuing companies to card holders wherein the outstanding balance on the credit card can be transferred to a less used card or a new card.
Banks provide incentive for customers who use balance transfer by providing a low interest or interest free period.
When an individual opts for balance transfer, the less used card or the new card from which the facility is being used will lower the credit limit proportionately to the balance transfer amount.
When is it useful?
High interest rate charged: If individuals face a situation where the interest rate charged by a new credit card is lower than what is charged by the current credit card, interest cost could be reduced by transferring the outstanding balance to the new credit card.
Dissatisfied with the service: For those individuals, who are not content with the service provided by the current credit card company, due to various issues can opt for balance transfer.
The individual can transfer the balance of such a card to another card and get rid of the old card.
Inability to finance the debt: If an individual has a high outstanding balance on a card and is unable to finance it currently because of short term liquidity crunch, or if the individual has an exorbitant debt to pay off, balance transfer can come as a temporary relief.
Charges involved
In order to induce customers, banks offer low rate of interest or sometimes even zero interest on balance transfer for around specified period.
What is noteworthy is the fact that these attractive rates (zero or low rates) are valid for only an introductory period i.e. 3-6 months, post which the bank will start charging you the normal rate of interest.
The process
Inform the credit card company to whom you would want your outstanding debt to be transferred to.
Fill in the form provided by them with details pertaining to your old credit card along with a copy of your latest credit card bill and submit it.
More importantly, note that moving from one card to another provides you with temporary interest relief. Also, do remember any purchases and expenses on the card on which you have opted for balance of transfer will not fall under the low or zero interest purview.
Source: http://www.rediff.com/business
Follow us : www.facebook.com/karvyprivatewealth
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