What are the drawbacks of balance transfer?

While balance transfer can be a helpful tool for paying off highinterest debt, there are also some drawbacks to consider:

1. Balance transfer fees: Most balance transfer offers come with a fee, typically a percentage of the transferred balance. This fee can add up quickly and offset some of the savings you might get from a lower interest rate.

2. Limited time offer: Many balance transfer offers have a limited time period, usually 618 months, during which the lower interest rate applies. After that, the interest rate may go up significantly, which could leave you with even more debt.

3. Credit score impact: When you apply for a balance transfer credit card, the credit card company will perform a hard inquiry on your credit report. This can temporarily lower your credit score. Additionally, if you close the original credit card account after the transfer, it could also lower your credit score by reducing your available credit.

4. Temptation to spend: Once you've paid off your highinterest debt with a balance transfer, you might be tempted to start using the original credit card again, which could lead to even more debt.

5. Approval is not guaranteed: Approval for a balance transfer credit card is not guaranteed, and if you are approved, the credit limit may not be high enough to transfer all of your highinterest debt.

It's important to carefully consider these factors and do the math to determine whether a balance transfer is the right choice for you.