Credit cards aren’t always the enemy: Some can even help you get out of debt

Dubai: Chances are, you’ve been warned time and again about the risks of credit cards — high interest rates, hidden fees, the temptation to overspend, and the very real danger of sinking deeper into debt.But what if a credit card could actually help you get out of debt? While it’s true that credit cards often open the door to more spending, not all of them are designed to trap you. In fact, some cards offer a way to manage — and even eliminate — your debt smarter and faster.“Credit cards that offer rewards or cashback can seem appealing, but if you’re carrying a balance with high interest, any rewards you earn will be wiped out,” said Abu Dhabi-based consumer credit analyst Rajesh Markara.“One smart way to escape debt is by using a balance transfer card — these let you move your existing debt onto a new card that offers zero interest for a set period.”How balance transfers actually workBalance transfer cards usually come with a promotional offer: a zero per cent Annual Percentage Rate (APR) for a limited time, typically between 12 and 21 months. During this window, you pay no interest on your transferred balance.However, most cards charge a balance transfer fee — usually 3% to 5% of the amount you move over.Here’s an example:Imagine you owe Dh10,000 on a card charging 19% APR. Paying Dh500 monthly would take you 25 months to clear the debt, costing you around Dh2,120 in interest.Now, transfer that balance to a zero-interest card with a 5% transfer fee (Dh500). Your new balance is Dh10,500.Paying Dh500 a month, you’ll clear the debt in 21 months — saving over Dh2,000 in interest!Will a balance transfer hurt my credit score?“When you apply for a new card, it triggers a hard inquiry on your credit report, which can slightly lower your score temporarily,” explained Dubai-based debt advisor Mirin Raul.“But as you pay down your debt faster, your credit health usually improves — meaning the small dip now can lead to a bigger boost later.”Choose the right card — and stick to the plan!Picking the right balance transfer card is crucial. Here’s what to keep in mind:1. Choose a long enough zero-interest periodMake sure the promotional term gives you enough time to fully pay off your debt. Otherwise, you’ll be stuck with a high interest rate again once the offer ends.2. Avoid cards that tempt overspendingSome balance transfer cards offer tempting sign-up bonuses to encourage spending. If you’re serious about paying off debt, steer clear.3. Watch out for hidden feesEven if there’s no annual fee, balance transfer fees, late payment penalties, and over-limit fees can add up. Always read the fine print.Know the difference: Deferred vs. waived interestNot all “zero per cent” offers are created equal. Mirin Raul explains:Deferred interest: You won’t pay interest during the promo period unless you miss a payment or don’t clear the full balance by the deadline — then all the accumulated interest kicks in at once.Waived interest: No interest accrues during the promo period. If you don’t pay off the balance in full by the end, you simply start paying the card’s regular APR.Always check your card’s terms carefully — look for key words like “deferred” or “waived” before you commit.Verdict: Balance transfers help only if you're disciplinedTransferring your debt to a balance transfer card is a golden opportunity — but only if you avoid falling back into old habits.“Once you transfer your balance, it’s vital not to rack up new charges on your old cards,” Markara warned.Otherwise, you’ll just be swapping one problem for another — and possibly paying even more in the long run.Pro tip: Don’t make balance transfers a lifestyle. If you keep rolling over balances just to avoid paying interest, you’ll keep paying transfer fees again and again, which can seriously add up over time.