Balance Transfer Credit Card: What is It and How to Apply for It?
Finance 1004

Balance Transfer Credit Card: What is It and How to Apply for It?

Balance Transfer Credit Card: What is It and How to Apply for It?

With a balance transfer credit card, individuals can actively reduce their outstanding bills with an existing credit card. Users have an attractive option to save more money with the use of these credit cards. 

What is a balance transfer? 

Balance transfer facility refers to the transfer of the outstanding balance of a credit card to a new credit card. Users can browse for a credit card that charges a lower interest rate to service existing credit card dues. 

Individuals find it significantly convenient to transfer their unpaid balance on a high-interest credit card to a low-interest one.

In some cases, financial institutions often allow individuals to transfer their credit card balances at affordable fees. Fees for these credit cards are much lower than the amount of interest payable on a high-interest card. Therefore, individuals often pay the negligible balance transfer fees to benefit from affordable interest payment on the new card. 

How does a balance transfer credit card work? 

A balance transfer credit card works when an individual transfers the outstanding credit card balance to a new card. As a result, the new credit card issuer clears the original issuer’s dues. Therefore, users can shift the obligation of payment to the new issuer. Availing a balance transfer facility is one of the ways to use a credit card wisely. 

What are the fees and charges of a balance transfer credit card?

  • 0% rate of interest for an introductory period, which can range between 2 to 3 months. After that, the interest charged per month is usually nominal either for a fixed period or continually.
  • Zero or nominal processing fee; the latter is usually 2% or Rs.199, whichever is higher.

What are the features of these credit cards?

Some of the features of a balance transfer credit card include –

  • Fuel surcharge waiver.
  • Zero joining fee.
  • Zero annual fees.
  • Purchase protection cover.
  • Air accident cover.
  • Cashbacks on movie tickets.
  • Discounts on dining.
  • Facility to convert purchases into EMIs.

Note that all balance transfer credit cards may not provide these features and benefits mentioned above.     

What are the factors to consider before opting for these cards?

The factors that ensure an effective balance transfer on an existing credit card is as follows – 

  • Check current unpaid credit card dues, rates of interest, and other fees.
  • Choose a credit card that charges an affordable interest rate. 
  • Compare whether the credit limit in the new card is adequate for the outstanding debt amount. 

Note that credit card companies put a cap on the minimum and maximum amount for transfer. Usually, the minimum amount is Rs.5,000, while the maximum is 75% of the credit limit. 

  • Analyze the cost of balance transfer and see whether it is beneficial for you. 
  • Choose the credit card to apply online option with the new financial institution. 
  • Place a request for balance transfer and do away with credit card dues. 

How to apply for a credit card that offers the balance transfer facility? 

The application process for a new credit card is quite easy. Since the attractive balance transfer facility is available with select companies, individuals must be aware of the application process. 

The process to apply for a credit card online for a balance transfer is as stated below – 

  • Visit the official website of a credit card issuer that allows the balance transfer facility. 
  • Fill up the credit card application with appropriate details such as name, proof of salary, and date of birth. 
  • Individuals have the option to view their application status online or via the official app. 

Additionally, individuals can save even further by using leading credit cards such as Bajaj Finserv RBL Bank SuperCard. With this exclusive card, individuals can also avail of an emergency personal loan that does not attract any interest for up to 90 days. 

Therefore, a balance transfer credit card is a convenient financial tool to reduce the burden on hefty interest rates. With this facility, individuals can manage their repayment strategy to repay their credit card debt without running the risk of defaulting.

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Finance 1004
@kumarshailend29 @kumarshailendra29

Shailendra Kumar is an experienced Financial Consultant and Tech Reviewer who has 6+ years of experience in the field of finance, business, and technology. He is very passionate to write about Finance, Business, Technology, Gadgets, Fashion, Lifestyle, etc.