Availing credit cards is easier but when it comes to the management of the same, people tend to lose control and start feeling the burden. Higher rate of interest charged on the credit cards is one of the reasons why people tend to default. The compounding interest rate results in increasing your debts. One option to manage your existing credit card debts is to avail a personal loan to consolidate the debts. This is the most sought after option as personal loans are easy to avail and lenders offer competitive rates on them which are significantly lower than the interest rate charged on the credit cards. Herein, the credit card holder takes a personal loan and using the loan amount clears off all the credit card debt. He is then liable to pay the principal amount along with the interest as monthly instalments to the new personal loan provider. An online personal loan can be applied through the digital platforms of the lenders or through the comparative platforms provided by Fintechs like LoansJagat.
The second option is to opt for a credit card balance transfer. This popular method of lowering your existing debts encompasses switching from one credit card to another offering a better rate of interest. The most important thing to remember here is that the switch must ensure that you end up saving some money which would have gone as interest and also to lower your burden.
Credit card pending dues can be very intimidating. Failures and defaults in the payments of credit card bills can result in hampering your credit score considerably and hence it is important to be disciplined with them. One key aspect of credit card balance transfer is that one can only transfer up to the defined credit limit of the new card. For example: If your credit limit of the new credit card is Rs.25000 and you are liable to pay dues of Rs. 30000, then you will be able to transfer only Rs. 25000 into your new credit card. Clearly, balance transfer comes with its terms and conditions and before opting for same, it is advisable to read the agreement and calculate whether the switch will actually be beneficial or not.
Here are some amazing benefits of credit card balance transfer.
- Fast processing: The process of transferring your current credit card debts from existing card provider to new card provider is fast and seamless. However, it is advisable to check the terms and conditions and clarify about any hidden charges with the lender when opting for the switch.
- Saving of money: The interest on credit cards is calculated is usually high. Even a slight decrease in the rate of interest could result in lowering your interest burden each month. As the cost of credit cards decreases, you end up saving on some money as well which would have otherwise gone as interest calculated compound-ly.
- Convenient: Credit card balance transfer is the easiest and most convenient method to clear the accumulated debts off the credit cards.
- Buffer time: When one opts for a credit card balance transfer, their current card provider gives them a buffer time to clear off the debts. The rate of interest charged during the buffer time is nominal to none. It depends from bank to bank.
- Easy transfer of debts: There is not much documentation requirement and the transfer of debts can be done without any hassle.
Before opting for credit card balance transfer, the cardholder must compare different banks on account of their offerings like rate of interest, penalty fees, payment cycle, processing fees etc and make a well informed and calculated decision. Comparing helps in choosing the best card provider offering the most attractive deal. Also, it is important to know about the processing of balance transfer, the interest rate charged during buffer time, terms and conditions etc to be sure of the switch. Various leading banks like Axis Bank, HDFC Bank, SBI, Punjab National Bank, Standard Charted Bank etc are offering the facility of the balance transfer. Zero in on the new credit card provider and make the switch from your burdensome high rate of an interest credit card to new one with lower interest rate.
LoansJagat will help you in finding the right lender and compare the terms to get the best deal.