Credit Card Balance Transfer

About Credit Card Balance Transfer

Are you looking for ways to save on credit card usage? Why not opt for a credit card balance transfer facility! The credit card balance transfer facility allows you to transfer your existing credit card balance to another credit card (usually a new one). This allows you to pay off your dues at lower interest rates.

Thus, you will be able to reduce financial strain and use the saved-up money in other areas required. Read the following section to know the benefits of balance transfer from credit card.

Credit Cards that Offer Balance Transfer Facility

There are numerous institutions that provide credit cards with balance transfer options. Such banks include:

• State Bank of India 

The SBI credit card balance transfer service can be initiated by sending a specific SMS to the bank, or just by calling their customer care number. The payback term ranges from 2 months to 6 months, but a monthly interest of 1.7% is applicable if the duration is 6 months.

• HSBC

The balance transfer facility is offered by HSBC for tenures ranging from three months to twenty-four months. An additional interest rate can be charged based on the term, and the processing fee is mandatory. As a customer of HSBC, you can make use of the balance transfer facility by calling the bank or just by sending them an SMS. With HSBC, you do have the option to foreclose the balance transfer without incurring any additional fees.

• Kotak Mahindra Bank

Kotak Mahindra Bank does provide the balance transfer facility. The bank allows a minimum transfer of ₹2,500. The total amount being transferred is restricted to 75% of your credit card limit. There is a processing fee that will be levied, which depends on the amount being transferred. The process of application can be done via telephone, SMS, or the bank's website.

• Axis Bank

Through Axis Bank’s balance transfer feature, the minimum amount that can be sent is ₹5,000. You can choose the tenures ranging from three months to six months, with the former generating no interest but the latter attracting interest on transfer. 

• Standard Chartered Bank

You can transfer balances of a maximum of ₹5 Lakhs with Standard Chartered Bank credit cards. A monthly interest rate of 0.99% is levied for the first six months, following which the standard card interest rates will apply. You can make use of this facility by sending an SMS to the bank requesting for a balance transfer. A minimum of 5% of the total amount will need to be transferred monthly.

Key Benefits of Balance Transfer from Credit Card

• Financial Stress is Reduced:

Compared to the cost of financing, balance transfer credit cards have far lower interest rates. Interest rates on a balance transfer is approximately 1.8% per month, while credit card interest rates are typically around 3.5% per month. Thus lower interest rates lead to reduced financial stress.

• Credit Score is Stabilised:

The balance transfer facility gives you lower interest rates, simplifying the payment process. Prompt payments lead to stability and improvements in your credit score.

• Interest-free Period:

After a balance transfer, most banks and credit card companies provide an introductory period without interest on new purchases. Thus allowing you to make fresh purchases without paying any interest.

• Other Benefits:

If you opt for the balance transfer facility, banks and credit card companies may reward you with introductory rates or other offers. Such as lower interest rates, longer interest-free periods, and other advantages.

How Does Credit Card Balance Transfer Work?

Are the interest rates on your current credit card too high for you to repay? If that’s the case, and if you find a credit card that offers more attractive interest rates, you can choose to opt for the balance transfer facility. To do this, you need to first check if the credit card with attractive interest rates allows balance transfers from other credit cards. 

If it does, you can submit an application for balance transfer. Once approved, a new balance transfer loan at a new economical interest rate will be issued to you. The promotional interest rate is generally valid for a specific period only. Within this period, you need to pay back the amount borrowed in full via easy instalments. This way, you do not have to pay any penalty charges. And you also get the advantage of making multiple low-cost repayments each month instead of paying the outstanding balance in one go.

How to Transfer My Credit Card Balance to Another Card

There are many different ways in which a credit card balance transfer can be done quickly. Here are the commonly available options offered by leading credit card issuers in the country. 

• On the Credit Card Issuer’s Website: 

You can visit the website of the credit card issuer, log into your account and check if you are eligible for the balance transfer facility. If you are, you can book it online, on the website itself. 

• On the Credit Card Issuer’s Mobile App: 

You can also download the mobile app offered by the credit card issuer from the Android or iOS store, log into your account and avail the credit card balance transfer facility. 

• Via the Credit Card Issuer’s Customer Care Helpline:

All leading credit card issuers have a dedicated customer care helpline. You can use this facility to book your credit card balance transfer. 

• Via an SMS or Call:

Lastly, check if the issuer of your credit card has any specific number you can send an SMS to or place a call to, in order to avail of the credit card balance transfer facility.

Credit Card Balance from One Card to Another Bank’s Credit Card

You should consider transferring your existing bank’s credit card balance to another bank if you are getting low-interest balance transfer credit card options for the same. The option is highly recommended in the scenario where you have accumulated considerable credit card debt with your existing bank and are unable to manage the funds to make full repayment on time. 

However, if you find a bank that is offering a credit card balance transfer facility at a low-interest rate, you should consider shifting to that new lender. This will lessen the burden of your credit card debt.

Who Should Apply for a Credit Card Balance Transfer?

If you have a significant amount of outstanding debt at a high-interest rate, it is usually suitable for you to apply for a credit card balance transfer. However, it must be noted that you must be able to pay off the amount due within a few months.

How to Apply for Credit Card Balance Transfer

Try any of the methods mentioned below to apply for a credit card to credit card transfer:

• Submit a request on the official website of a bank or financial institution.

• Visit the nearest bank branch and request a credit card balance transfer.

• Call on the credit card customer care number and request the executive to guide you on the credit card balance transfer process from one bank account to another.

You can avail of the NEFT facility for online money transfers against a credit card. For this, you will have to provide the details of the credit card-issuing bank, the recipient bank, and other details. Including the name of the bank, the cardholder’s name, and the credit card number of the other bank against which the transfer will be done.

Alternatively, you can transfer your credit card balance to your bank account using a Demand Draft which must be issued under the name of the bank.

Who Can Apply for Credit Card Outstanding Balance Transfer?

The bank approves the request of a credit card balance transfer facility based on its internal policies. While the selection is at the discretion of the bank, there are some things you can do to improve your chances of getting approved for credit card balance transfer. These include having a good track record when it comes to monthly credit card spending, the pattern of transactions, as well as repayment history.

To increase your eligibility for a credit card balance transfer, follow the ways mentioned below:

• Make sure you have a decent credit score

• Avoid late payments and defaulting on loans

• Maintain a healthy relationship with your bank

If you get approval from the bank, the credit card amount transfer benefits can be realised quickly.

Important Points to Remember while Using Credit Card Balance Transfer

Before you avail of a balance transfer facility on your credit card, there are some important things that you need to keep in mind. This way, you can make the most of this benefit without taking on any added liability. Check out some such essential pointers below:

• Compare Different Offers:

Many leading banks and credit card issuers offer credit card balance transfer facility. Make sure you compare all the offers available to you to identify the most favourable interest rates in the market. 

• Read the Terms and Conditions:

Once you’ve chosen a credit card to transfer your balance to, ensure that you read the terms and conditions of the balance transfer facility thoroughly. This will ensure that you don’t get caught off-guard when you avail of the benefit. 

• Pay Your Dues Promptly:

After you’ve transferred your balance to a different card, you need to pay your dues on time. Any delays may result in the promotional interest rate being cancelled. You will then have to pay interest at higher rates. 

• Ensure You Pay the Dues Within the Promotional Period:

The promotional interest rates on the balance transfer facility are only valid for a specific period. Be aware of the repayment tenure and make sure that you pay the dues off within this window of time. 

• Look for Any Balance Transfer Fees:

Some credit card issuers may levy balance transfer fees. Check if your credit card issuer does, and be aware of the amount you will have to pay when you transfer your credit card balance to a different card.