What is credit card balance transfer? How it can help you save money - Know details
Credit card balance transfer: A credit card balance transfer is simply moving outstanding debt from one credit card to another card. It is mainly done for low-interest rate and to avoid credit card debt on the existing card.
Credit card balance transfer: A credit card balance transfer is simply moving outstanding debt from one credit card to another card. It is mainly done for low-interest rate and to avoid credit card debt on the existing card.
What is a balance transfer?
In a situation where one is unable to make credit card bill payments within the due date, it can be a smart decision to use a balance transfer to avoid compound interest. It is important to understand here that the customer can transfer his credit card balance from one credit card to another.
Credit Card Balance Transfer: How is it used?
For instance, if an individual holds two credit cards, the billing date for credit card 'A' is 20th and 10th is the due date for payment. Hypothetically, a bill of Rs 1 lakh is generated for credit card 'A' on 20 of the month of January and the date of payment will be on September 10.
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If the customer is unable to make the payment by September 10, then the customer will not get the benefit of an interest-free period. If interest starts at the rate of 3 per cent, then every month the customer will have to deposit interest of Rs 3-4 thousand till the complete amount is cleared. Here, one needs to note that not all cards offer balance transfer facilities in equal measures.
In such a situation, one may transfer the balance of Card 'A' to Card 'B'. Suppose on September 8, the customer transferred the bill of credit card 'A' to 'B'. Due to this facility, one will not have to deposit any interest on 'A' card. The customer receives two options during the balance transfer. The repayment periods can be 2 months or 6 months.
Credit Card Balance Transfer: Can choose between 60 or 180 days
One can choose either of the two options as per convenience. During the balance transfer, it is advised to keep in mind that it is necessary to deposit the minimum amount. This means when the balance is transferred to card "B", it will be included in its built-in date. You may have to deposit the entire balance within 60 days, but during this time it is necessary to deposit the minimum amount when the bill is generated.
List of a few Credit cards that Offer Balance Transfer
- SBI Card
- Axis Bank
- Standard Chartered Bank
- HSBC
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