Introduction: Before you consider going for a balance transfer, you will have to first know about this credit card balance transfer and how it works. To explain it in a simple manner, credit card balance transfer is that, you will transfer the outstanding balance amount on one card to another card. By this, you will basically complete the payment of the first card and now owe that outstanding balance amount on the other credit card.
A guide to credit card balance transfer in India
The first reason why few people might choose balance transfer could be that the other card is providing a lower rate of interest which would mean it would be somewhat cheaper to repay it by making use of the other credit card.
List of banks which offer balance transfer
There are several banks which will provide credit cards which have the facility of balance transfer available on them. Few of such banks are:
ICICI balance transfer
The facility of balance transfer provided by ICICI bank will allow the balance of any other credit card to be transferred to their ICICI Credit cards. The repayments of such balance transfers can be done in either in the tenure of 3 months or 6 months considering the instalments. Interest will also be charged on the amount which has been transferred and is also payable along with the balance which has been transferred. The bank will also provide the option to foreclose the payments if the amount of balance and the interest is paid.
SBI balance transfer
SBI Credit card balance transfer to other bank account will follow the same set of general principle and this can be started either by logging into the account of credit card using your login credentials or by sending a specific SMS to the bank or you can also just call up to the bank’s customer care facilities. The periods of repayment will be 2 months or 6 months. Anyways, an interest of 1.7% per month will be charged if the tenure you choose is for 6 months.
The card balance transfer facility provided by HSBC bank can be considered for tenures which are ranging between 3 months to 24 months. The rates of interest will be charged as per the tenure and the fee for processing will also be applicable. Just like State bank of India, the facility of a balance transfer can be used by calling the bank, or by sending an SMS to them. HSBC will not offer the foreclosing option on balance transfer for which no additional fee will be charged.
Axis bank will also provide this facility of balance transfer along with the above banks. The minimum amount which you will have to consider for a balance transfer is an amount of Rs.5,000/-. The tenures which are available would be 3 and 6 months. If you choose the tenure of 3 months, then you will not be charged with any interest whereas, for the tenure of 6 months, you will be charged with an interest in the balance transfer.
You may be interested in ICICI International Debit Card Benefits.
Process of balance transfer from one credit card to another
Balance transfer on credit card is always the best option to consider for paying off large and pending bills on credit card. Anyways, card balance transfer will make some sense only when the bank to which you are considering to transfer the balance is offering rates of interest better than the original one on which you are actually having pending dues.
The most important point to keep in mind about the balance transfer on credit card is that you will only be able to transfer the amount to your new credit card which is in its credit limit. Hence, of your second credit card has a credit limit of Rs.50,000/- and if your pending dues on the other card are Rs.70,000/-, then you will be able to transfer only Rs.50,000/- to the new credit card under the scheme of the balance transfer.
There are few forms which several banks furnish for the facilitation of the application of balance transfer facility on credit cards. The below information is required to be provided when you are applying for a balance transfer on credit card
- Credit limit
- Credit card expiry date
- Outstanding credit card balance amount
- Credit card number.
Most of the banks will need a few documents from the applicant for accepting the request for balance transfer facility on credit card
- Photocopies of the credit card.
- Credit card bill statements of last 3 to 6 months.
- Address proof like your utility bills or any of the Government issued ID cards like Passport, Aadhaar card, PAN card etc.
The best feature of the credit card balance transfer that rewards you is that the complete pending amount will be paid in the form of a demand draft which has been issued by the new credit card company on your old credit card. This will save you from the burden of extra interest payment on the pending due to the credit card.
The interest you will pay now will be completely decided by your new credit card company. Basically, the interest which is charged to get the facility of card balance transfer is less than the actual charge made by the banks on pending bills of the credit card. Anyways, this rate of interest which is lowered will only be applicable for a certain time period after which standard rates of interest will be applicable. Therefore, it is very much important to repay your credit to the new credit card issuer within the time for avoiding any increase in the interest rates.
You may also check the SBI SimplySave Credit Card Benefits.
Points to keep in mind when you are using a balance transfer facility
Though it is always convenient to use this facility of the balance transfer, it is always suggested to know all the main aspects of it before you go for it. Below are a few points listed which will mainly affect your decision to avail the facility of card balance transfer for paying off your existing credit card debt.
- If you avail the facility of card balance transfer, it will decrease your credit limit in the same proportion. For instance, if your credit limit on your new card is Rs.50,000/- and you have transferred Rs.25,000/- under balance transfer, then the credit limit which would be available for you to make other transactions using a credit card will be Rs.25,000/-.
- The best method of using this facility of card balance transfer is to pay off all the dues within the free interest rate period. After that, standard rates of interest on the credit card will be applied which will need more payments to be made.
- The rate of interest which is lower on your card balance transfer will not be applicable to other purchases which you make using your credit card. These transactions will come under standard rates of interest charged by the issuer of the credit card.
- Balance transfer facility is actually provided to customers who have been a user of credit card for one specific company for a minimum of one year. This is to make sure that the credit cardholders will not keep jumping from one card issuer to others for availing lower interest rates.
- If you still have some credit limit left after the balance transfer, it is always suggested to stop using the credit card for purchases or transactions until all the payments of a balance transfer are made and all the charges subsequent to it are completely cleared.
You can also check HSBC Premier Credit Card Benefits.
Main benefits of using the facility of card balance transfer
The balance transfer is considered to be a well-known and comfortable feature of credit cards. This is an option which will help the credit cardholders to get out of the debts which keep getting worse due to compounding interest rates. Let us check at some of the most interesting benefits of balance transfer facility on credit cards.
- It will help you in saving on the additional amounts of interest which you end up paying as a result of the pending credit card bill.
- The comfortable way to avoid the credit card debt which is accumulated when compared to other means of payment of credit limit.
- Quick processing of this facility of balance transfer will make it simple for the customers to get rid of all their pending debts.
- Dues from one or more credit card can be transferred when you are using this feature of card balance transfer.
- You will be allocated with buffer time for the payment of your outstanding balance amount. This time period will have no interest rate or it will have a nominal interest rate.
When you are choosing to transfer the balance you will be required to remember a few things. The first is that few banks will provide this facility only if the balance being transferred is for a credit card which is not issued by them.
Most of the banks will not put any sort of restrictions on the card type for which transfer of balances is being availed. However, there would be some conditions which will govern the minimum amounts and the maximum amounts which can be transferred to the other credit card. All the rates of interest and conditions will be decided by the banks and they may change depending on the time. So, it is always suggested to confirm the same with the card-issuing bank before you apply for the facility of the balance transfer.