You’ve owned hundreds of credit cards over the years, but nothing makes you feel like you’re getting ahead financially… until now! A balance transfer credit (BTC) card facilitates your getting out of debt faster to achieve your financial goals. It can even save you interest amount along with building build good credit. But how exactly does it work? are there any risks involved? Find out what it means here!
What is a BTC Card?
BTC cards are a practical way to lessen the money you owe to your bank. These cards allow you to transfer your current debt onto a new account with a less interest rate. It can give you more time to repay your original loan while saving money in the long run.
How does a BTC Card Work?
- BTC Cards are cards that help you consolidate your debt. The way they work is that the Balance Transfer Card company pays off your old high-interest rate debt.
- You then, in turn, make monthly payments to the BTC Card company on your new low-interest rate card until you’ve paid off all of the money that was transferred to the new card.
- It’s important to note that some BTC Cards charge a fee for this service. This fee can be worth it if you get less interest rate than your current card offers.
Advantages of BTC Cards
To understand the working of the BTC Card, one needs to be aware of its prominent advantages of it that are as under:
- BTC Cards Help Save Interest
- BTC cards help save on interest by transferring a high-interest credit card balance to a new account having a lesser rate.
- To use this type of card, you need the account number from your current high-interest account and the account number for your new low-interest account.
- Once you have those numbers, call the bank that issued your low-interest accounts. Click on Top 6 Balance Transfer Credit Cards In India (bankbazaar.com) for more details.
- BTC Cards are Convenient to Use
- BTC cards are a way to consolidate all your debt onto one card with less interest rate.
- Rather than paying back the original amount plus interest, you pay back the new balance for a set amount of time. It can help you save money in the long run because you’re not paying more than you already owe.
- BTC Cards Allow Multiple Transfers
- A great way to reduce debt is by transferring your balances from multiple credit cards to one.
- BTC Cards are designed for this purpose! Many cards offer a 0% interest rate for the first year, allowing you to pay less each month to pay off your debt quicker. You may also get an introductory rate of 0% for six or twelve months instead of just one year.
- BTC Cards Offer Ample Buffer Period
- BTC Cards are a relatively new invention to the world of credit cards. When you make purchases with your BTC Card, any amount left over on your purchase will be transferred to a new account. It can be an account at the same or different bank altogether.
- The main benefit of using this type of credit card is that you have an ample buffer period before you have to start paying off the transferred balances.
- BTC Cards Stabilize Your Credit Score
- If you want a good credit score, the best way is by transferring your balances onto a new card with an introductory 0% APR offer.
- It will allow you to pay off your debt without incurring interest charges. Once you have paid off the transferred debts, you can close down the account and start using a different one. Refer to Balance Transfer Credit Cards: What is a Balance Transfer Credit Card? | Bajaj Finserv for more details.
Tips While Using BTC Cards
Some helpful tips for using BTC Cards are as under:
- Transfer balances from high-interest-rate cards to low-interest-rate cards before your introductory offer expires. It will save you money spent on interest charges.
- Don’t take out another BTC Card: You may be tempted to get another BTC Card with an even lower interest rate as soon as your introductory offer expires. Don’t do it! There’s no guarantee that you’ll find a card with an even lower interest rate than what you already have. Once you’ve paid off all the debt, any new debt could start accruing all those expensive interest charges again.
- Make sure your BTC Card account is in good standing. If you consistently make payments on time, your interest rate will not increase. Conversely, if you miss payments or close your account, you could have a much higher interest rate on your debt. It can make paying off what you owe much more difficult!
- Keep track of your balances: BTC Cards can make managing debt much easier. But they can also pull you into a false sense of security. It’s easy to be lulled into paying off your BTC Card without paying attention to other debts you may have as well. Keeping a close eye on your accounts will help ensure that you don’t let any debt go too long unpaid!
- To avoid closing your BTC Card account, only pay the minimum amount each month. Even if you’re stuck with a higher interest rate for a little while longer, you’ll be glad you made this choice in the long run.
A BTC card is a good option if you want to reduce your debt. You must pay off the debt as quickly as possible. If not, then you will end up paying more in interest than what you originally owed. For more information about BTC Card and its working, check Personal Loan (piramalfinance.com).