Credit Card, plastic money or personal loan enables cardholders to pay later for the purchases made now. In short, it offers interest free credit facility for a pre-defined period, beyond which it attracts the highest interest (As high as 17%). If, despite this clause, this form of credit is popular, it’s only because of its convenience; you need not carry cash on you all the time. But don’t get into the debt trap, but rolling over your credit card payment to the next month by opting to pay only the “minimum amount” as the outstanding amount will then attract one of the heaviest interest slabs. Over a period of time, and developed as a habit, it can drive you deep into debt from where it may be very difficult to climb out of, leaving ‘balance transfer’ as the only option for you.
Credit card debt also reflects very poorly on your credit history, and may impact your credit worthiness when you apply for other loan products – so watch out! Get in touch with a Creditfina adviser if you have any questions/doubts about balance transfer of your credit card outstanding.
Since the margin for the card companies is high in this kind of a product, they often design and come out with attractive offers (“First year’s subscription free” “revolving credit” “immediate cash withdrawal from ATM,” “converting a purchase into EMI” (HDFC is very active in this area), balance transfer from another credit card at minimal or zero cost,” “maximum reward points” that can be redeemed for retail purchases or flying hours” “gift coupons,” “waiver of surcharges on railway bookings” “cash back” on fuel purchase etc.), but don’t fall for these baits, if you are not a disciplined spender or don’t have a stable income to clear your debt in time.