Credit card: The use of credit cards is increasing rapidly. In today’s time, spending money with a credit card is exactly like taking a loan from a bank and spending it. Because of this, there are times when people do not have enough money to pay their credit card bill. If you ever get stuck in such a situation and you have many credit cards, then you can use the facility of balance transfer.
What is balance transfer?
Through balance transfer, you can pay the bill of one card from another. This process is called balance transfer. Suppose you have a balance on one of your credit cards, but you are unable to pay it. If you plan to pay it next month, then you will have to pay late fees as well as interest on that amount for about a month. This interest can also be charged at the rate of 36-48 percent per annum. In such a situation, if you have another credit card, then you can transfer the balance from it at a very low interest rate.
How is balance transfer done?
There can be two ways of paying the bill of another card from any credit card i.e. balance transfer. The first way is that you have to call the customer care of the bank and get the balance transferred from them. The second way is that you transfer the balance yourself from the bank’s app or website. However, for this you will need card details.
On the app or website of the card from which the money is to be transferred, you will have to fill the balance transfer amount and the details of the card to which the money is to be transferred. At the same time, you can also choose the way to repay the balance transfer. Either you have to pay the lump sum amount or you have to take the option of EMI.
What are the benefits of balance transfer?
If you do not transfer the balance, then you will have to arrange money from somewhere to pay the entire bill of your card. Otherwise you will have to pay late fees and huge interest or take a loan and pay interest on that too. A big problem with the loan will be that you will not get a loan for a month or 2-3 months.
On the other hand, if you transfer the balance, then the extra money you will have to spend in that case will be less. On the other hand, due to not paying the bill, you will not fall into the category of default, which could have spoiled your CIBIL. EMI facility is also available in balance transfer. In such a situation, the balance you are transferring from one card can be gradually paid in EMI.
When does balance transfer become a problem?
Balance transfer sounds very good, but if you understand in simple language, you are taking another loan (payment from another card) to repay one loan (credit card). Although there will not be much problem in transferring balance once or twice, but if you use it too much then it can affect your CIBIL score.
If you are careless, you can get caught in a debt trap
A big problem in this is that if you use balance transfer for different cards many times, then while repaying the loan, you can get trapped in a new debt trap. If you pay the balance transfer amount on EMI, then gradually your EMI every month can increase, which can become a burden on you.
