A balance transfer fee is a charge that is applied when you transfer credit card debt from one card to another. The charges of the transfer fees are calculated on the total amount you transfer. A balance transfer fee is a one-time charge applied when the balance is transferred from one lender to another.
Usually, balance transfer fees are common in credit cards, which offers low initial interest rates.
Credit card companies offer low-percentage interest rates for an initial period to entice customers for applying credit cards. Once the card is approved, the borrower transfers an existing balance from another credit card to a new card or combines debts from a number of lenders to one debt payable to the new lender.
The initial interest rates can be as low as 0% to 5% and the rates typically alter to a higher percentage after 6 to 18 months. Subsequently, a lender discloses the future rate in the variable Range such as 1.24% to 25.24%. The customer has to pay the rates when the teaser rates expire, which will ideally depend on the individual’s credit ratings and on the broader Market conditions.
The balance transfers are the opportunity to pay a substantial debt more quickly at a low or even zero interest rate.
The interest rates on credit cards average 15% p.a. To save interest, you can apply for a new low-interest credit card for balance transfer.
If you have dues on multiple credit cards, then you can choose a balance transfer, which will assist you in smooth-running your finances.
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Everyone cannot qualify for a credit card balance transfer. If you are missing your EMI payments, then you might face a problem.
A balance transfer is not the permanent solution, your dues have to be paid by yourself even your card has a low-interest rate. A balance transfer can help you pay for sometimes, but it is a temporary solution.