When you have pending credit card dues coupled with compounding interest rates, you may want to carry out a balance transfer to ease the situation. It allows you to reduce financial stress and strengthen your money management abilities. But what is a balance transfer credit card? Read on to find out.
What is a balance transfer?
Assume that you have a significantly high outstanding dues on your credit card along with a high interest rate. In such a scenario, a balance transfer is beneficial as it involves transferring the pending dues to another financial institution that offers you an economical rate of interest. The key benefit is that you will be able to clear your outstanding dues in one go, reduce your expenditure towards penalty charges and have just one, low-cost payment to make each month.
What is a credit card balance transfer?
As the name suggests, a balance transfer credit card allows you to carry out a balance transfer. Not all cards allow this in equal measure, so be sure to pick one smartly if this is your goal. You can transfer your outstanding balance to this new card and clear the amount more conveniently, at a lower cost. Therefore balance transfers not only ease stress, but help you a significant sum.
How a credit card balance transfer works
Apart from a low interest rate, certain balance transfer credit cards offer you other benefits too. For example, some come with a pre-determined 0% interest period, while others offer you nominal interest rates for a specified duration. Here it is important to note that when carrying out a balance transfer, you typically have to pay a processing fee. Therefore before you carry out a balance transfer, calculate how much you will save on the whole. To be effective, your savings should be more than the processing fees and additional costs that may be involved in the balance transfer process. It’s best to do a cost-benefit analysis beforehand to have absolute clarity.
How you can tackle multiple debts
You can carry out a credit card transfer to get rid of debts piled up on multiple cards, not just one. So, assuming that you secure a credit limit of Rs. 2 lakh, you will be able to utilise it to tackle outstanding balances of Rs. 75,000 and Rs. 60,000 on separate cards, through one credit card. With one, and not multiple, due dates to keep track of, you can repay your dues more easily.
A step-by-step guide to how to do a credit card balance transfer
The process is as straightforward as it seems. Take a look at how to go about transferring your balance to another issuer.
- Check your current outstanding dues, interest rates and penalty charges.
- Find a credit card that offers you a lower rate of interest.
- Check that the credit limit is sufficient given your outstanding debt.
- Assess the balance transfer fees and decide whether the swap is worth it.
- Make a credit card application with your new issuer.
- Request a balance transfer and clear your debt.
Additional Read: How to check credit card balance
One of the best balance transfer credit cards is the Bajaj Finserv RBL Bank Credit Card. Its Transfer N Pay facility lets you utilise up to 80% of your credit limit for balance transfer purposes. To qualify for this programme all you need to do is stay clear of any pending outstanding payments for more than 30 days. Then, simply send an SMS to 5607011 with the following details to start the process: < BTY >< Last 4 digits of other the bank’s card number >
Apart from being one of the top balance transfer credit cards, the SuperCard also offers you other beneficial features like the ability to make 50-day, interest-free cash withdrawals at ATMs and avail a 90-day, interest-free loan by converting your credit limit. Further, it helps you shop economically through credit card deals and discounts, and allows you to convert spends of over Rs. 3,000 into EMIs.
Now that you know how credit card balance transfer works, waste no more time in applying for the right card to avail this facility. To apply for a SuperCard as quickly as possible, be sure to check your pre-approved credit card offer first. By entering your name and contact number you can get instant approval through a customised deal.
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