Credit Card Balance Transfer

Shopping using a credit card is efficient and easy, however, repaying the spent amount can get tricky if you cannot accumulate the said funds before the due date. You would be charged penalties and the interest charges would keep compounding. This can in turn negatively affect your credit card score. To do away with this risk, certain banks offer the advantage of transferring your card balance to another bank and pay off your dues. This reduces the financial stress and lets you improve your score by working on your repayment pattern. However, to avail this benefit you would need to use credit card balance transfer feature.

What is a Credit Card Balance Transfer?

It is important to note that not all credit cards come with the balance transfer facility. If you are looking to avail this benefit you would need to carefully select & apply for credit cards that lets you transfer the balance on another card. Such a card would be called a balance transfer or a money transfer credit card. Using this card, you can transfer the amount to clear the dues of your existing card, which you can then repay conveniently at a lower cost.

How Does Credit Card Balance Transfer Work?

If the interest charges have compounded to a point that you are finding it difficult to repay the outstanding balance every month, you might consider using the option of 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 installments. 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 chooses the customers eligible for online money transfer based on its internal policies. Though who gets selected is completely up to the bank, there are some things you can do to improve your chances of getting approved for credit card amount transfer to a bank account. These include having a good track record when it comes to monthly credit card spends, pattern of transactions as well as the repayment history. If you have been considered by the bank and have piling interest charges on a card and wish to pay it off while also improving your money management abilities, you can apply for credit card amount transfer benefit easily.

Features and Benefits of Credit Card Balance Transfer

Some of the features and benefits of credit card balance transfer are listed below-

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

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

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

  • Banks may have conditions regarding the minimum and the maximum amount that can be transferred from one card to another

  • When you avail balance transfer on a credit card, the credit limit on the new card is reduced by the same proportion

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

  • This reduced interest rate is not applicable to new purchases made on your credit card

What are the Fees and Charges Levied to Transfer Money from One Credit Card to Another Credit Card?

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

  1. Processing Fee - To transfer outstanding credit card amount to a bank account, you will most likely have to pay a nominal processing fee of 1% to 3% of the loan amount.

  2. Transaction fee - A transaction fee may be also charged by the new credit card issuer, over and above the processing fee, when applying for a credit card. This could be any amount between 1% and 5% of the loan amount.

  3. Interest Rate - Some bank’s levy 0% interest charges for an initial period. Past this grace period, standard interest charges are applied which varies from bank to bank.

How to Apply for Credit Card Balance Transfer?

Usually, it is the bank that makes calls or sends mailers regarding credit card balance transfer offers. However, if you own a credit card balance transfer card in India and the bank has not contacted you regarding the offer, you can initiate a request to avail the facility through any of the methods mentioned below-

  • Submitting a request to transfer the credit card balance to another bank account on the official bank website

  • Visiting the nearest bank branch and requesting for a credit card to credit card transfer of balance

  • Call on the credit card customer care number and request the executive to tell you how to transfer the credit card balance to another credit card.

For online money transfer against a credit card, you can avail the NEFT facility. You would need to provide the credit card issuing bank, the details of the recipient bank, such as the name of the bank, the cardholder’s name, the credit card number of the other bank against which the loan is to be issued. Alternatively, you could also transfer credit card money to the bank using a Demand Draft which would be issued under the bank’s name.

How to Transfer Money from One Credit Card to Another?

Balance transfer from one credit card to another credit card can be done in quick, easy steps.

  • First things first, check the outstanding due, interest rate and the 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

  • Take into account all balance transfer fees and charges to 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.

Frequently Asked Questions

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

    The process of balance transfer is hassle-free and it takes only a few days before the bank processes the balance transfer request on the credit card. The duration varies from bank to bank.

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

    Some banks offer the balance transfer facility only if the money is transferred to a credit card that has not been issued by them.

  • ✔️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 loaned and transferred to clear the dues.

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