You could occasionally find yourself unable to make your credit card payments on time. This could be owing to an immediate need for money due to an illness or job loss, or it could be that your credit card is still accruing interest on the outstanding balance.
During the COVID blackout, when all commercial activity ceased, many credit card holders recently found themselves in a similar scenario. To make things simpler, a lot of card issuers give you the opportunity to transfer your outstanding balance to a credit card with a balance transfer feature that has a grace period during which you pay either no interest or a reduced rate. The Balance Transfer Facility is what we’re talking about here.
Top Credit Cards for Balance Transfers in India:
Almost all credit cards offer the ability to transfer balances, but there are several things to consider before you do so. While selecting the finest credit card for a balance transfer, you could become confused because there are so many premiums to entry-level credit cards on the market. We are here to assist you by providing a list of the Best balance transfer credit card available in India, along with details on the fees and charges they impose and other relevant details:
What is the Process of Balance Transfer?
When you move an unpaid debt from one credit card to another, the new card issuer pays the old card issuer for the amount owed; however, you now owe the new card issuer credit, which you must repay in accordance with the terms and conditions of the new issuer. You often have a grace period to pay off your debt during which the interest rate is either nil or extremely low. The new credit card’s credit limit is reduced by the outstanding balance. The difference between the new card’s actual credit limit and the transferred balance is the card’s practical credit limit.
Credit Card Balance Transfer Advantages and Drawbacks:
A credit card holder who is unable to pay off all of his liabilities in full may choose to make a balance transfer. In this manner, he will be able to pay off all of his bills, leaving him with just one outstanding obligation. The advantages of credit cards with balance transfers include the following:
Improves the stability of your credit score
When you are authorised for a balance transfer, your interest rate will be reduced, making it more straightforward for cardholders to pay off their debts more quickly. After completion, the cardholders’ credit scores will begin improving automatically, and over time, this will assist them in stabilising their credit scores.
Interest-Free Period
After a balance transfer, credit card companies also provide an introductory period without interest on new purchases. Customers can avoid paying interest on new purchases in this manner.
Financial Stress is Lessened
When compared to other credit cards, the interest rate that is paid on the balance transfer credit card is extremely low. In the case of ordinary credit cards, cardholders are required to pay interest at a monthly rate of 3.5%, whereas balance transfer credit cards have an interest rate of 1.8%. With this, the cardholder’s financial burden is automatically lessened because he now needs to pay a lesser interest rate.
Additional advantages
Credit card companies give an interest-free period on new purchases after a debt transfer. Customers can avoid paying interest on new purchases in this manner.
Not all benefits associated with bill transfer credit cards are accurate. Everything has advantages and disadvantages, and balance transfer credit cards are no exception. The downsides of the best balance transfer credit card will now be covered.
End up paying a higher interest rate
You will end up paying a higher interest rate on your balance transfer if you apply for a credit card but are not authorised for promotional interest rates due to variables like your credit score or current debt.
The danger of incurring further debt
You now have more credit accessible to you as you have consolidated all of your debt onto one credit card. The credit card holder must be strict not to exceed this accessible credit limit because doing so could lead to him falling back into debt.
Your credit score may suffer if you make a balance transfer
Your credit score will be impacted by applying for or receiving a new credit card. This is because your credit score will be negatively impacted at any time if your credit utilisation ratio rises above 30%.
Balance Transfer Costs May Increase
You must pay both the new credit card’s annual fee and a balance transfer fee when you apply for a balance transfer. Hence, you should carefully review all the associated fees and charges before transferring your debt to a new credit card; they should be lower than the interest you must pay on the previous credit card.
Who May Submit A Credit Card Balance Transfer Application?
You can pay off your high-interest credit card debts with the use of a balance transfer service, which is a crucial tool. Hence, those who have a sizable amount of debt with a high-interest rate on their names may apply for a balance transfer. They can efficiently pay off their obligations with the use of this facility without incurring significant fees.
What Does Balance Transfer At 0% Mean?
One benefit of credit cards is a 0% APR on balance transfers, which enables you to relocate debt from another account and pay it off interest-free for a limited time. The typical duration of 0% APR balance transfer deals is between 12 and 15 months, while some cards extend this period to 21 months. Below is a list of a few Indian credit cards that offer 0% interest on balance transfers:
- Axis Bank’s Insta Simple Credit Card
- Signature credit card from Axis Bank
- SBI Signature Credit Card
- Platinum Credit Card from SBI
Indian Card Issuers who Provide a Balance Transfer Option:
The ability to transfer funds between banks is something that several Indian banks, including HDFC Bank, ICICI Bank, SBI, Standard Chartered Bank, Kotak Mahindra Bank, HSBC Bank and RBL Bank offer to their cardholders. Often, the debt transfer option is only available to primary cardholders. In terms of balance transfers, each bank has its unique policy. We’ve reviewed some of the biggest card issuers in the nation’s balance transfer terms and policies in this section.
SBI Cards Balance Transfer
SBI Cards provides two options for transferring the balance from one credit card to another:
The transferred amount must be paid back under the initial plan within two months and you don’t pay any interest (0 interest credit cards balance transfer) (60 days). However, in this instance, a processing fee of 2% of the transferred money, with a minimum of Rs. 199, is required.
With the second strategy, you have six months (180 days) to pay back the transferred funds. In this situation, the interest rate is 1.7% each month, but there is no processing cost.
How To Use:
SBI Balance Transfer Cards may be used in four different ways:
Through the SBI Cards website
Through SBI Cards mobile app
Using SMS – send BT to 56767
by dialling 1860 180 1290 or 39 02 02 02 to reach the SBI Cards customer service line (prefix local STD code)
Balance Transfer Using SBI Cards On EMI:
Additionally, SBI Cards enable you to transfer the balance owing on your existing credit card into EMIs that you can pay off in either 3 or 6 months.
- If you decide to pay the transferred money in three monthly instalments, you will be required to pay a processing fee equal to 1.5% of the transferred amount plus interest, with a minimum payment of Rs. 199.
- A 1.27% interest rate will be applied if you pay back the transferred money in 6 monthly instalments. You will be required to pay a processing fee equal to 1.5% of the transferred amount in this instance as well (minimum Rs. 199).
You could think about using the SBI ELITE Credit Card, Club Vistara SBI Card, BPCL SBI Card Octane, etc to transfer the unpaid debt from your current credit card from another bank.
There are Three Methods to use The Balance Transfer on the EMI Feature:
- Through the SBI Cards website
- Through SBI Cards mobile app
- via SMS: Send BT to 56767
- by contacting 1860 180 1290 or 39 02 02 02 of the SBI Cards helpdesk (prefix local STD code)
HDFC Bank:
The largest credit card issuer in the nation, HDFC Bank, also enables you to transfer the balance owing on an existing (credit card from another bank) to an HDFC credit card and pay it off in convenient monthly instalments over the course of nine to forty-eight months. The transferred amount will bear interest at a monthly rate of 1.1%. In addition to the interest, you must pay a processing cost equal to 1% of the transferred funds, with a minimum price of Rs. 250. The HDFC Infinia Credit Card, HDFC Regalia Card, HDFC Diners Club Black Credit Card, HDFC Millenia Credit Card, etc. are a few of the greatest HDFC bank credit cards to which you can transfer the unpaid balance on your current credit card.
Standard Chartered Bank:
The following requirements must be met in order to transfer the outstanding balance on your (another bank’s) credit card statement to your Standard Chartered credit card:
- A maximum of Rs. 5 lacks can be transferred to your Standard Chartered credit card, and the balance must be repaid in monthly payments of at least 5% of the transferred amount.
- After a 6-month grace period during which the outstanding balance is subject to a monthly interest rate of 0.99%, you must pay the usual interest rate that applies to your Standard Chartered credit card.
How to Apply:
You can SMS BT NOW to +91 9223010121 or call the bank’s hotline at 080-39401166/080-66011166 for applying for a balance transfer to a Standard Chartered credit card.
Kotak Mahindra Bank:
Another well-known card issuer that enables balance transfers is Kotak Mahindra Bank. With a Kotak Mahindra card, you can transfer the unpaid balance to a credit card from another bank. You may also get a 90-day interest-free grace period on the outstanding balance with Kotak Mahindra Bank.
- The least amount that you can transfer to your Kotak Mahindra credit card is Rs. 2,500, and the maximum amount that you can share is 75% of your credit card’s credit limit.
- Only credit cards that have been used for at least the previous 6 months can use the balance transfer feature.
- Your Kotak Mahindra credit card is subject to a transaction fee of Rs. 349 for every Rs. 10,000 transferred.
How To Use The Service:
The following four methods are available for applying for a balance transfer on your Kotak Mahindra Credit Card:
- Through net banking
- Through mobile banking
- By text message (SMS “BT” to 5676788)
- Contacting 1860 266 2666 for Kotak Mahindra customer service.
ICICI Bank:
You can use your ICICI bank credit card to transfer the remaining balance from your other bank’s credit card. The minimum outstanding balance on your ICICI bank credit card must be Rs. 15,000 in order to use the balance transfer option, and the maximum amount that may be transferred is Rs. 3 lakh. You can settle the outstanding balance with ICICI in three to six months’ time by making simple monthly instalments. You can transfer the unpaid balance on your credit card from another bank to one of the top credit cards offered by ICICI Bank, like the ICICI Bank Sapphiro Credit Card, ICICI Bank Emerald Credit Card, ICICI Bank HPCL Super Saver Credit Card, etc.
How to Apply:
Text “BT” to 5676766 to request a balance transfer on your ICICI Bank credit card.
RBL Bank:
Moreover, RBL Bank provides its cardholders with the ability to transfer balances. You can pay off the transferred amount from your credit card from another bank in convenient monthly instalments over a period of 3, 6, or 12 months.
How to Utilise The Balance Transfer Option:
The following methods exist for you to apply for a balance transfer from your credit card from another bank to your RBL Bank Card:
- By using the bank’s website’s chat box
- By dialling 7045906912 or 7045958512 and leaving a missed call
- By texting “BTEMI” to the numbers 5607011 or 5607033.
- By using the customer service number listed on the backside of your RBL Bank credit card, you can reach by dialling.
HSBC Bank:
You can use this feature to transfer the remaining balance on your credit card from a different bank and pay it back in convenient monthly payments.
- For the payback of the deposited amount, you can select a 3, 6, 9, 12, 18, or 24-month period.
- If you select a repayment period between 3 months and 12 months, an interest rate of 1.17% per month will be applicable; however, if you choose an 18- or 24-month repayment period, an interest rate of 1.33% will be charged.
- A processing fee equal to 1.5% of the transferred money must also be paid in addition to the interest (subject to a minimum fee of 200 Rs).
- Sending the SMS “BTR” to 575750 will allow you to request a balance transfer on your EMI facility.
Perpetual Balance Transfer:
You can transfer the balance outstanding on your credit card from another bank and repay it using this HSBC Bank tool to pay less interest overall. In the case of a perpetual balance transfer, there is no set period of time during which payments must be made.
- To use this option, you must have a minimum Rs. 5,000 outstanding balance on your other bank’s credit card.
- You are required to pay a minimum of Rs. 100 as well as 5% of the deposited amount each month.
- The balance that has been moved to your HSBC Bank credit card is subject to a monthly interest rate of 1% to 1.2%.
- A processing fee of 1% of the transferred money, with a minimum charge of Rs. 149, is added to the interest that is charged.
Sum Up:
Transferring the balance from one credit card to another bank’s credit card, where you get a grace period with a zero or lower interest rate, can be a smart move if you are having trouble paying the balance due (which attracts recurring compound interest), in order to avoid getting caught in a debt trap. The bank will typically let you pay the balance in convenient monthly instalments.
However, it is important to keep in mind that the standard interest rate will apply if you are unable to repay the entire transferred amount within the allotted time period. Also, a debt transfer can possibly affect your credit profile because it requires a hard inquiry into your credit record. Nonetheless, failing to pay the required amount on time has a negative impact on your credit history; for this reason, it is advised to transfer the amount due to another credit card that offers a 0% or low-interest period for repayment of your outstanding amount.
FAQs:
Q. What is an EMI Balance Transfer?
A. Several card issuers, like SBI and HDFC, provide customers with the option to use balance transfers on EMIs, which enables you to pay off the transferred balance in equal monthly payments.
Q. While moving an outstanding Balance From one Credit Card to Another, Does The Card’s Credit Limit Drop Accordingly?
A. Indeed, the amount transferred results in a reduction in the effective credit limit of the credit card. The effective credit limit of the card is calculated as follows: Real credit limit of the new card – transferred debt.
Q. Would Using the Balance Transfer Option Impact My Credit Score?
A. Indeed, a debt transfer hurts your credit profile because it results in a hard inquiry on your credit report. You should bear in mind, nevertheless, that late payments on credit card bills have a negative impact on your credit score.
Q. How does HSBC Credit Card Work With Permanent Balance Transfers?
A. You can transfer the unpaid balance on a credit card from another bank to your HSBC credit card and pay it off in monthly payments thanks to the bank’s permanent balance transfer option. There is no set period of time during which the transferred amount must be repaid, unlike EMIs. You must pay a minimal amount each month equal to 5% of the transferred sum.
Q. Does Transfer a balance Affect Credit Score?
A. A debt transfer may have both positive and negative effects on your credit card depending on a number of variables.
Q. Should I Acquire a Credit Card With a Balance Transfer?
A. To pay off your obligations more quickly, you can apply for a credit card with a balance transfer feature. If authorised, you could save a significant amount of money that would have otherwise been paid on interest.
Q. How Much of an Outstanding Balance Can be Moved to a Credit Card From a Different Card Issuer?
A. The maximum transferrable amount is subject to the conditions and policies set out by each card issuer. For instance, SBI Cards permit balance transfers up to 75% of your credit limit, while HSBC Bank permits up to 95% of your credit limit to be used.
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