Credit Card Balance Transfer: What is it & How Does it Work?

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A credit card balance transfer is a refinancing facility that’s offered by many banks and financial institutions to help you consolidate debt. A balance transfer can also help you plan and manage your finances better.

Keep reading to know more about credit card balance transfers and how they can help you!

How Does a Credit Card Balance Transfer Work?

When you opt for a credit card balance transfer, your outstanding dues are transferred to your new credit card account. This way, you can have all your credit card balances on one account for better tracking and management.

Additionally, credit card issuers usually offer lower promotional interest rates and better terms like extended repayment tenor. This makes credit card balance transfer a prudent financial decision in many cases.

Balance Transfer Facility Offered by Providers

These days, most leading credit card issuers offer credit card balance transfer facilities. Here, we have listed some leading providers that offer balance transfer to help you make an informed decision:

State Bank of India

SBI Card makes it quite easy for you to transfer your credit card balances from other bank’s credit cards to your SBI Card account. By doing so, you can consolidate outstanding dues and enjoy lowered interest rates.

SBI Card also lets you choose a plan that works best for you - 0% interest for 60 days or 1.7% per month for 180 days. You can initiate a credit card balance transfer by sending an SMS or calling SBI Card’s customer care number.

HSBC

HSBC allows you to repay your outstanding balance in easy EMIs at lowered interest rates. You can choose between flexible repayment plans ranging from 3-24 months. HSBC also offers a lowered interest rate of 10.99% to 15.99% per annum. They additionally offer a discounted processing of 1.5% of the total outstanding amount.

Kotak Mahindra Bank

The bank offers an interest-free period of 90 days on credit card balance transfers. In case you complete your balance transfer repayment within these 90 days, then no interest will be charged on fresh purchases.

How to Transfer Credit Card Balance From One Card to Another

There are a few different ways to transfer your credit card balance from one credit card account to another. Here are a few of these methods and how you can get started:

Through the Credit Card Issuer’s Website

Login to your credit card issuer’s net banking website and go on the ‘Credit Cards’ section. If you are eligible for a credit card balance transfer, you can place a request for the same on the website itself.

Through the Credit Card Issuer’s Mobile App

Go on your credit card issuer’s mobile application and login to your account. Navigate to the ‘Credit Cards’ section and see if you are eligible for a credit card balance transfer. If you are eligible, then enter all the required information and get started with the credit card balance transfer.

Through the Credit Card Issuer’s Customer Support Team

You can get started with your credit card balance transfer by calling your credit card issuer’s customer service team. They will inform you if you are eligible for the transfer and in case you are, they will guide you through the process.

Through SMS or Call

Many credit card companies allow you to initiate a credit card balance transfer by sending an SMS or giving a missed call on a specified number.

Who Can Apply for a Credit Card Outstanding Balance Transfer?

Eligibility for credit card balance transfers are determined based on a number of factors like the bank’s internal policies, your relationship with the bank, etc. Therefore, the eligibility criteria for balance transfers can vary from one credit card provider to another.

Here are a few things that can enhance your chances of being eligible for a credit card balance transfer:

Make sure you have good credit history and score
Avoid defaulting on loans and/or make late payments
Maintain a cordial relationship with your credit card issuer

Having a good credit profile and history will make a good candidate for credit card balance transfers. This will also help you access better terms like lowered interest rates, processing fees, and quicker processing timelines.

Important Points to Remember while Using Credit Card Balance Transfer

Plan Your Repayments in Advance

When opting for a balance transfer, it’s crucial that you understand your repayment liabilities. This will help ensure that you’re not caught off guard by repayments. Take account of your finances and understand how much you can afford to set aside for repayments.

On that note, try and make the total repayment within the promotional period. If not, you will likely be charged a higher interest rate.

Compare Different Offers

There are a number of different credit card balance transfer offers provided by credit card issuers. Though these offers are quite similar, it’s important that you shop around and get in touch with multiple credit card companies before settling on a provider.

This will help you understand existing rates as well as compare and contrast to make an informed decision.

Make Sure to Read the Terms and Conditions

Before transferring your outstanding credit card balance, make sure you read the terms and conditions thoroughly. Understand the interest rates involved, processing fees, repayment timeline, etc.

DISCLAIMER

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial advice or endorsement of any sort.

The information including interest rates or fees and charges with regard to any credit card, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks or NBFCs. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any application or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.

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Do balance transfers affect your credit score?

It’s unlikely that a credit card balance transfer will affect your credit score negatively. In fact, a balance transfer can potentially improve your credit score, while also reducing your repayment burden. But, remember that constantly opening a new credit card account can cause your credit score to fall.

How long does it take to transfer a credit card balance from one bank to another credit card?

Credit card balance transfers typically take between 5 days and 7 days. However, in some cases, it can take up to 21 days. It’s best that you get in touch with your credit card provider to understand the exact timeline.

Can you transfer the balance from one credit card to another one at the same bank?

It’s possible to convert your outstanding credit card balance into EMIs. However, it’s unlikely that you will be able to transfer your credit card debt to another card from the same issuer.

Is there an upper limit on the amount of money that can be transferred using the balance transfer facility?

In most cases, you will only be able to make a balance transfer to the tune of your new credit limit.

When should I consider opting for a credit card balance transfer facility?

A balance transfer is a good idea if you have a good amount of revolving credit card debt and the rate of interest is quite high. The high interest rate can drive up your repayment liability by quite a bit and make it difficult for you to repay your debt.

In such cases, it’s best to switch to a credit card provider that offers lowered promotional interest rates.

How many times can I transfer my credit card balance?

While there’s no limit on the number of times you can transfer your credit card debt, it’s best to avoid multiple balance transfers. This is because getting new credit cards within a short span of time can hurt your credit score quite a bit.

What are the important points to remember while transferring a credit card balance?

When making a credit card balance transfer, make sure to:

Do a cost-benefit analysis between the existing and the new repayment plan
Understand the new interest rate and processing fees
Make the repayment within the promotional interest period

Should I go for a credit card balance transfer facility?

A credit card balance transfer facility is a nifty refinancing facility that can help you bring your repayment liability down by a considerable amount. However, it’s advisable to exercise caution and not take it up unless you’re confident in your ability to make the repayment on time.

Does a credit card balance transfer help?

Yes, a credit card balance transfer can be quite beneficial in helping you reduce interest accrual on credit card debt. This, of course, can drive down your total credit card debt by a significant amount.

Should I go for a balance transfer or apply for a personal loan?

Generally, personal loans come at a higher rate of interest than credit card balance transfers. So, generally, it's a good idea to opt for a credit card balance transfer instead of a personal loan.

What are the fees and charges on balance transfer from credit card?

The fees and charges associated with balance transfers vary from one credit card issuer to another. Processing fees and refinancing fees are some of the most common types of fees levied on credit card balance transfers.

What are the ways to repay the loan for credit card balance transfer?

You can use a number of online and offline payment methods to make your credit card balance transfer due repayments. This can include UPI, NEFT, RTGS, ACH, etc.

How can I check the status of my credit card balance transfer application?

You can check the status of your credit card balance transfer application by logging in to your credit card issuer’s app or website. Alternatively, you can also call their customer service team to understand your application status.