How Can you Save Money by Using a Balance Transfer Credit Card?

Save-money-by-balance-transfer-cards-in-pakistan

If you are looking to use a balance transfer credit card then you need to know how you can save money when transferring outstanding balance from one card into another credit card. They serve a very useful purpose because a 0% balance transfer card is one of the cheapest ways in which you can settle a small debt where you pay no interest for a fixed period. The only payment that you would require is to clear the minimum amount by due date on your statement closing date each month. This will mean that you can save hundreds of even thousands of Rupees by making the switch.

 

Balance Transfer Card – What is it?

If you have debt owing on other credit cards then you can use a 0% balance transfer credit card to pay them off. The other option would be to transferring your balance to another card which offers you lower APR than your original card and may include this as an offer to join their product. This means that the amount you owe is transferred to a card where you pay no interest for a fixed period of time. This makes it possible to pay off your debt without adding more on top of what is owed.

 

How much could you save?

As an example, if you owe PKR 130,629.19 on a credit card from UBL Pakistan at an APR of 20%, you will be paying PKR 26,125.84 per annum in interest. Should you decide to take out a balance transfer credit card from Banks Alfalah (example only) Visa Gold or Classic Credit Cards or Silk Bank that offers 0% interest on the balance for 12 months you would save yourself PKR 313,510.08 in interest. However sometimes banks like Bank Alfalah may offer your better low balance transfer rates upon switching. To further enhance the benefits of using a balance transfer card, you can actually transfer more than one card onto one balance transfer card and this can save you even more money.

 

What are the costs of using a balance transfer card?

Each bank in Pakistan will have their own fee for transferring a debt over to their card. Usually, the fee is set between 1% and 3% of the amount that you transferring but in the main, the amount you will pay will certainly be less than you are paying in interest and this will mean that you will make savings. To ensure that you are making savings it is always worth comparing the balance transfer cards that are available to you. This is because the amount that many of these cards charge to transfer your debt will help you to reduce the amount that you owe. This can help to save a considerable amount each year.

Using our comparison facility at mawazna.com, you can compare best credit cards offered by Pakistani banks that can offer you better balance transfer rates when switching. You will then be able to work out exactly how much money you could save by switching. This will enable you to understand which card will offer you the biggest saving because after all, you want to reduce your debt and save money at the same time.

 

Save money by understanding, which card is right for you?

While you are looking for a balance transfer card on offer from a large number of Pakistani banks, you will need to consider a number of things. You will have to think about the amount of time it will take for you to pay off the debt against the cost of the fee for transferring the balance. It is common for the shorter 0% interest balances to have a lower transfer fee. However, you will need to consider your credit history maintained during your past transactions or ability to pay off your loans including credit card outstanding balance because this will have an impact on the number of deals that you will have access to. Also worth considering that usually, banks do not allow to transfer debt from one of their own product to another product from their product portfolio. The best offers will only be available when you are switching from one credit card issuer to another credit card issuer (bank).

Comparing cards and understanding the figures involved will make it easier to understand which card is right for you. The ability to compare removes the hard work and that is why finding the right card is easier than it ever has been. However, it makes perfect sense to take your time and consider all options before making the decision to transfer your debt to another card.

 

Mawazna.com is a leading financial services comparison platform in Pakistan that enables consumers to make more informed decisions when choosing financial products and services including credit card comparison, selection and applying for a specific card product offered by leading card providers in Pakistan. Visit us online to compare banking, insurance (car insurance, travel insurance, and health insurance) and broadband products to make more informed decisions.

 

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Author: Team Mawazna

Team Mawazna

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