Are you paying a heavy interest rate on your credit card? There’s a solution to pay the amount due on your card at a lower interest rate – opt for a credit card balance transfer. Opting for a balance transfer facility could help you clear your bills faster and at a lower interest rate.
Let’s navigate through what balance transfer credit cards are and how they work.
Credit card balance transfer implies transferring your existing credit card dues to a new card. Let’s say that you have significantly high outstanding dues on your credit card. To add to your woes, you are paying a high interest rate on your card. In such a situation, you can opt for a credit card balance transfer, where you move your outstanding credit card dues to a new card at a lower interest rate.
This would help you pay off your credit card bills in a much economical manner and avoid any penalty charges that would have been levied due to missed or late payments. However, take note that a credit card balance transfer is just a facility. You will still have to repay the outstanding due amount. And missed payments could lead to heavy penalty fees.
Not all credit cards offer balance transfer. Let’s take a look at some of the cards or banks that offer this facility along with their benefits and other details.
The credit card balance transfer is an effective way to pay off huge credit card bills. However, the balance transfer is only feasible when the credit card you are transferring the amount to offers benefits that are more lucrative than the previous card. For example, the card offers low-interest rates compared to the one on which you have pending dues.
However, the most important point you should keep in mind while transferring the due amount is that the amount to be transferred to the other credit card must be within the other card’s credit limit.
For instance, let’s assume that your due amount on credit card A stands at Rs. 75,000. But the credit card limit offered by credit card B to which you want to transfer the amount is Rs.50,000. Thus, you will only be able to transfer Rs. 50,000 to credit card B and the remaining Rs.25,000 will show as outstanding on credit card A.
The applicant must provide the following information while applying for credit card balance transfers:
Most banks also require the following documents for proceeding with credit card balance transfer applications:
You can pay the pending amount in the form of demand drafts issued by the new bank towards the old one.
Let’s check out some of the best balance transfer credit cards from top banks:
You can activate the credit card balance transfer offer on the SBI credit cards by logging into the credit card account, sending the bank an SMS for the same, or even calling their customer care support. The repayment period varies from 2 months to 6 months.
The HSBC credit card balance transfer offers range from 3 months to 24 months, with varying interest rates based on tenure. Furthermore, HSBC also offers foreclosure on the credit card balance transfer and the bank does not charge any additional fee for it.
The bank allows a minimum transfer of Rs. 2,500 with no maximum limit. However, Kotak Mahindra limits the transfer amount to 75% of the credit card limit. Moreover, the bank charges a balance transfer fee depending on the amount transferred. The application process remains the same as mentioned for the above banks.
The minimum amount the Axis Bank allows you to transfer is Rs.5,000. The tenure available at the bank stands at 3 months and 6 months. The 3-month duration does not attract any interest rate, while the interest rate is charged for the 6-month duration.
Standard Chartered Bank offers customers the option to transfer balances of up to Rs. 5 lakh to their SC credit cards. You can also make a payment of a minimum of 5% of the transferred amount each month. The option can be availed through the same process as mentioned for the above banks.
You can find the best balance transfer cards matching your requirements by following some simple steps and keeping a few crucial points in mind.
Compare the terms and conditions offered by different credit cards. More importantly, compare fees, interest rates, and credit card limits, and understand the cardholder benefits.
More importantly, some credit cards now have 0% annual charges apart from other benefits for new qualifying applicants. It can help you select the best balance transfer credit cards that best suit your requirement. You must keep the introductory period in mind to avoid paying more interest once it expires. Lastly, you should also consider the long-term benefits, such as cashback rewards.
Let’s explore some of the most prominent benefits of credit card balance transfers:
If you opt for a credit card balance transfer, you must, first, consider the drawbacks of the process.
Listed below are some points you should keep in mind when availing a credit card balance transfer option to pay off your debts:
A credit card balance transfer can help you streamline your finances by paying off consolidated debts, saving you a significant amount of money on interest. However, it all depends on how you use the credit card balance transfer. Furthermore, you can maximise the benefits when you understand the ins and outs of balance transfers.
Ans. When you have accumulated a considerable amount of dues on a credit card with high rates of interest and face trouble repaying it, you can opt for the balance transfer to avoid paying high interest and transfer it to a card that levies a lower interest rate.
Ans. No. Credit card balance transfer is an easy, quick, and almost hassle-free process. It usually takes a few days, and the period of doing so varies from bank to bank.
Ans. Banks don’t usually entertain constant credit card balance transfers. The number of times you can transfer the credit card balance is completely subjective to conditions set by a certain bank.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
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