Balance transfer credit cards can be a useful tool for those who want to consolidate their debts and pay them off at a lower interest rate.
However, they also come with certain drawbacks. Here are some of the pros and cons of balance transfer credit cards:
Pros:
Lower Interest Rates: One of the biggest benefits of balance transfer credit cards is that they often come with a lower interest rate than your existing credit cards.
Pros:
Debt Consolidation: If you have multiple credit card debts with high interest rates, a balance transfer card can help you consolidate them into one account.
Pros:
Introductory Offers: Many balance transfer cards offer an introductory period of 0% interest, which can last for several months.
Cons:
Balance Transfer Fees: Most balance transfer credit cards charge a fee for transferring your balance from another card.
Cons:
Short Introductory Periods: While some balance transfer cards offer an introductory period of 0% interest for several months, others may only offer this for a shorter period of time.
Cons:
Temptation to Spend: If you transfer a balance to a new credit card, you may be tempted to use the card for new purchases, which can add to your debt.
Cons:
Credit Score Impact: Applying for a balance transfer card can impact your credit score, especially if you apply for multiple cards within a short period of time.