Credit Card Balance Transfer

A credit card balance transfer can be defined as the transfer of one credit card balance amount to another, this can be seen as a method employed by many lenders (banks) to get customers to use shift to another credit card. The balance transfer is mainly done to enjoy low interest rate and avoid credit card debt on the existing card. However, the frequent balance transfer can lead to making poor financial choices in the long run.

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 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.

How long does it take to process the Balance Transfer request?

If you are transferring the amount to an existing credit card then the request may be processed within a week. If you are applying for a new credit card on which you want to avail the balance transfer facility. Then it may take up to a month to process the request.

Features of Credit Card Balance Transfer

Benefits of Credit Card Balance Transfer

Following are the benefits a credit card balance transfer

How to Apply for Credit Card Balance Transfer?

How to Transfer Credit Card Balance from One Card to Another Bank’s Credit Card?

The most common question in everyone’s mind would be on how to go about this balance transfer, we have tried to illustrate the process in a few simple steps.

Customers who have had a good track record with a bank with respect to their credit card spends, transaction pattern and payment history, becomes eligible for a balance transfer on credit card from time to time, depending on the internal policies of the bank. Only select customers are given preference for balance transfer.

Funds would be transferred via NEFT or Demand Draft. For NEFT, the customer needs to send an e-mail to the Bank with the details of other bank’s name, customer’s name as per other bank details and other bank credit card number in which the balance transfer is to be taken.

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

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 the 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 between 1% and 5% of the loan amount.
  3. Interest Rate: Some bank’s levy 0% interest charges for the initial period. Past this grace period, standard interest charges are applied that vary from bank to bank.

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:

  1. Check the outstanding due, interest rate, and the penalty charges you are paying on a credit card
  2. Search for a new credit card that is offering you funds at a lower rate of interest
  3. Check if the credit limit on the new card is enough to clear the outstanding debt on your current card
  4. Take into account all balance transfer fees and charges to calculate the final cost you are likely to incur
  5. Submit your credit card application and request the bank to transfer the balance and pay off your debt
  6. If approved, your credit card dues will be cleared

Who Should Apply for Credit Card Balance Transfer?

Cardholders who are carrying significant amounts of debt at a high interest rate may apply for a balance transfer. This will help them pay off the debts without incurring hefty charges. Do note that balance transfer is best suited when the user can pay off the due amount within a few months. If he finds that it will take longer than a few months, perhaps a year or two, then a Personal Loan will be better suited.

Credit Card Balance Transfer

Balance Transfer in credit cards means that you transfer the amount you owe on one card to another card. By doing this you actually end up paying for the first card and owe that amount on the other credit card. One main reason why someone might go in for a balance transfer could be that the other card offers lower interest rates which would mean it would be cheaper to pay it back through the other card.

Features of Credit Card Balance Transfer

Transfer your other bank credit card balances to Card and enjoy a lower rate of interest. Save money and pay back through convenient payment options.

  • Consolidate your multiple balances into one by transferring all of them to SBI Card
  • Easy payment options
  • Lower interest rates
  • Due to the impact of COVID-19, Balance Transfer payment will be made via NEFT, directly to your other bank credit card account, instead of cheque. Stay at home, stay safe.

Documents Required

  • Pan Card Number
  • Passport Photo
  • Address Proof
    (Valid Driving License / Valid Passport / Aadhar Card)
  • ID Proof
    (Valid Driving License / Valid Passport / Voter’s ID / Aadhar Card / Pan Card)
  • Credit Card Statement for 6 months
  • Credit Card Photocopy

How to do Credit Card Transfer Balance?

The most important point to note about credit card balance transfer is that you can transfer only that amount to your new credit card which is within its credit limit. So, if your second credit card has a limit of Rs.50,000 and your pending dues from previous credit card are Rs.75,000, then only Rs.50,000 can be transferred to the new credit card under the balance transfer scheme.

There are forms which various banks furnish to facilitate application of credit card balance transfer facility. The following information needs to be furnished while applying for credit card balance transfer.

  • Credit Limit
  • Expiry date of the credit card
  • Outstanding credit amount
  • Credit card number

Benefits of Credit Card Balance Transfer

  • Quick processing for balance transfer makes it easy for customers to avail and get rid of their pending dues
  • Helps you save on the extra interest amount that you end up paying as a result of accumulated and pending credit card bill
  • Convenient way to get rid of accumulated credit card debt as compared to other means of paying back credit
  • Debts from one or more cards can be transferred when making use of credit card balance transfer feature

Points to Remember

  1. Availing credit card balance transfer reduces your credit limit in the same proportion.
  2. The lower interest rate for credit card balance is not applicable to new purchases that you make on your credit card. These transactions fall under standard interest rates offered by the credit card issuer.
  3. The best way to use credit card balance transfer is to pay off all your dues within the free or nominal interest rate period.
  4. Balance transfer is generally offered to customers who have been a credit card user for one particular company for at least a year. This is to ensure that credit holders do not keep hopping from one credit issuer to another in order to avail lower rates of interest.
  5. While you still may have credit left after transfer of previous credit card balance, it is always a good strategy to refrain from using your credit card until all balance transfer payments are paid and all subsequent charges are cleared.
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