Balance Transfer From Credit Cards

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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) and 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.

Key Benefits of Balance Transfer from Credit Card

Some of the key benefits of credit card balance transfer are listed below:

 

  • It is easy to apply for a balance transfer on a credit card and the processing time is quick.

  • You can save on compounding interest charges that get accumulated on your outstanding credit card bill.

  • The lower interest rate helps to reduce the EMI amount thus enabling you to repay timely and improve your credit score.

  • You can transfer outstanding balances from one or more cards through credit card balance transfer.

  • In most cases, a grace period is offered to clear bills at a nominal or 0% interest rate, which allows you to save more.

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:

 

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

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

  3. 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 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 such as 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 credit card balance to bank account using a Demand Draft which must be issued under the name of the bank.

Who Can Apply for a Credit Card Balance Transfer?

If you are a cardholder who has 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 Does Credit Card Balance Transfer Work

If the interest charges on your existing credit card have compounded to a point that you are finding it difficult to repay, you may opt for a credit card balance transfer. When you do so, a special credit card balance transfer loan with a fixed and economical interest rate is issued against your card.

This loan money is then transferred from the new credit card to the bank account of the existing card and the dues are cleared in full. You can then pay back the borrowed amount in easy instalments. As a result, your penalty charges are obliterated and instead of paying up in one go, you can make low-cost payments every month.

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 to credit card 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 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.

Fees & Charges on Balance Transfer from Credit Card

A credit card to credit card balance transfer attracts certain fees and charges. Some of these credit card balance transfer charges are listed below:

 

  • Processing Fee: To transfer the outstanding credit card amount to a new account, you will most likely have to pay a nominal processing fee ranging between 1% and 3%.

  • Interest Rate: Some banks levy 0% interest charges for the initial period. Past this grace period, standard interest charges are applied that vary from bank to bank.

Credit Cards that Offer Balance Transfer Facility

There are several banks that offer credit cards with a balance transfer facility along with the card. Some of these banks include the State Bank of India, RBL Bank, Citi Bank, HDFC Bank, and ICICI to name a few. Here is some detailed information on the facilities offered by these banks:

Bank Name

Interest Rate Offered

Processing Fees

Applicable Period

SBI

0%

 

 

2% or ₹199 (whichever is higher)

60 days

 

1.7% per month

 

Nil

180 days

RBL Bank

0% - 11.73%

 

 

 

₹499 to ₹750

3-12 months

Citi Bank

 

 

0% Intro APR for certain initial months (may vary from card to card)

 

Up to 26.24% APR

 

 

 

3% to 5% of the service fee

Up to 21 months

HDFC Bank

Interest rate will be communicated at the time of booking.

 

 

₹199

9-48 months

ICICI Bank

Interest rate will be shared as per the bank’s prevailing rates.

 

 

Processing rate will be shared as per the bank’s prevailing rates.

3-6 months

How Do I Transfer My Credit Card Balance To Another Card

A credit card money transfer can be done quickly in the following manner:

 

  • Check the outstanding due, interest rate, and penalty charges you are paying on a credit card.

  • Search for a new credit card that is offering you funds at a lower rate of interest.

  • Check if the credit limit on the new card is enough to clear the outstanding debt on your current card.

  • Consider all balance transfer fees and calculate the final cost you are likely to incur.

  • Submit your credit card application and request the bank to transfer the balance and pay off your debt.

If approved, your credit card dues will be cleared.

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’s credit card in case 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 to lessen the burden of your credit card debt.

Impact of Missing Credit Card Payments

A missed credit card payment can, unfortunately, come with heavy penalties. The impact of missing credit card payments depends on how late that payment is and the terms of your credit card. You can mainly incur damage to your credit score which is very hard to rebuild once it is affected. You can easily fall into a vicious cycle of debt that can make life miserable. In such a situation, a credit card balance transfer can be the way out for you to ease the debt and make payments over a period of time.

FAQs on Credit Card Balance Transfer

  • ✔️Do balance transfers hurt your credit score?

    Balance transfer does not hurt your credit score. In case you find yourself unable to pay the debt on your existing credit card, you can opt for a balance transfer to improve your credit score. However, opting for a new credit card could reduce the average length of your credit history.

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

    The process of a credit card balance transfer is quick and takes only a few days before the bank processes the balance transfer request on the credit card. The duration varies from bank to bank. For example, for the State Bank of India, the balance transfer from a Visa credit card to your SBI Card takes 2-3 working days, while for other cards it takes 5-7 working days.

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

    Most banks do not offer the option to transfer your credit card balance from one card to another if they belong to the same bank. Therefore, it is imperative to check with your bank before deciding to opt for the balance transfer facility there.

  • ✔️How much money can be transferred at a time using a credit card?

    At any point in time, you can only transfer an amount that is within the new card’s credit limit. If the debt is higher than the credit limit, only the amount that is available on the new card can be utilised and transferred to clear the dues.

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

    If you are unable to pay the outstanding balance on your existing card at the prevailing interest rate for a significant time, your credit score will be affected negatively. To prevent this and pay back the borrowed amount at a lower interest rate, you can opt for the credit card balance transfer facility.

  • ✔️How many times can I transfer my credit card balance?

    Transferring your credit card balance multiple times is not a great idea as it reflects negatively on your credit profile. Moreover, even though you may wish to opt for the facility, it is up to the bank to decide if you are eligible to avail multiple credit card balance transfers.

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

    While transferring a credit card balance, you must remember that this facility will reduce the credit limit in the same proportion. Additionally, you will not be able to make new purchases at the same rate, i.e. lower interest rate on which you get a new credit card. Most importantly, you must know that you have to pay standard credit card interest rates as applicable once the grace period is over. Hence, you must try to pay all your dues within the grace period.

  • ✔️Should I go for a credit card balance transfer facility?

    To save up on the interest payment on the existing credit card, you can opt for a credit card balance transfer facility.

  • ✔️Does balance transfer help?

    A credit card balance transfer can surely be beneficial if the difference between the interest charged by the existing card and the new card is quite substantial. It can not only help you come out of your debt situation but also you can end up saving a lot of money that may be paid as interest.

  • ✔️How long does it take to process the balance transfer request?

    Processing a balance transfer request is usually quick and seamless and the time taken usually depends from one bank to another.

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

    If you think you can repay the outstanding amount within a few months, then opting for a credit card balance transfer facility would definitely make sense. But, on the other hand, if you think that the repayment process might take a few months or more, then opting for a personal loan would be a better choice.