When someone transfers a massive amount of payment from one credit card to another, then we call it a credit card balance transfer. In this case, a new credit card is necessary. It is because the bank will credit the amount to this new card account. People who want to transfer money at a low-interest rate can use this mode. They can get many advantages like some exciting rewards, cashback offers, and so on by using this method.
What do you mean by credit card balance transfer?
It implements a money transfer procedure from a credit card to another credit card of a different bank. The entire process doesn't consume so much time. However, you can't transfer money also if both the credit cards are of similar banks. It is an essential thing that you should remember.
You can see multiple credit card associations enticing money transfer fees to mislead customers. However, if you are a cardholder, you can get many promotional offers. The companies offer their customers a specific time about 6-18 months when they won't take any interest charge.
Benefits of Balance Transfer
Reduced Financial Strain – The interest rate of transfer money in the credit card balance transfer is significantly lower. The finance charge of credit cards is around 3.5% every month. But for the balance transfer, the interest rate becomes 1.8% per month. A few card providers are there who offer 0% interest rates. It is the most exciting offer that you can get.
Stabilize Credit Score – If the interest rate charged to you is significantly lower, then it becomes easier for you to make payments. As a result, you can maintain the credit card score also. Besides, you can pay the balance in proper time.
Interest-Free Period – You can get an interest-free period from the credit card providers. Therefore, it becomes beneficial for credit cardholders.
Other Benefits – Besides, the cardholders can get introductory offers from credit card providers. The offers they provide, such as interest-free periods, low-interest rates, and so on are exciting. It is the most attractive benefit that they offer to the cardholders.
Fees & Interest Rates on Credit Card Balance Transfer
Processing Fee - In the case of balance transfer money, you need to pay an extra fee. The range of these processing fees is between 1% and 3%. Apart from this, a few banks are also there who charge a flat fee. Interest Rate – Usually, the interest rate for a balance transfer is 0.75%. However, the interest rate of credit card balance transfer may be 0% also for a limited period.
Who can apply for Balance Transfer?
The credit card balance transfer is advantageous for people who want to transfer money at a low-interest rate. So, they must take assistance from balance transfer credit card. Using it, they don't need to give additional interest rates or processing charges.
But you need to remember that it is suitable when you can pay the entire money within a few months. If you see that it may take a year or more than that, then you must go for a personal loan.
How to apply for the Credit Card Balance Transfer?
Do you know how to transfer money with a credit card? A new credit card comes with a 0% interest on balance transfer. You need to check whether the interest rate is automatic or it relies on a credit score.
You can apply for it through Netbanking, contacting customer care, through SMS, etc. But for this, you should be a credit cardholder.
If you need a new credit card for money transfer, then you need to check a few things. Verify whether you fit with the eligibility criteria set by the specific bank or not. Here, you can know the necessary details related to it from a particular bank. Proof of identity, address, income source- are some essential documents. You may need these documents while applying for the credit card balance transfer.
Conclusion:
Credit card balance transfer is a method that helps you to send money easily with a low amount of interest rate. It doesn't change your credit card rating or credit score.
Frequently Asked Questions:
Q. What is a Zero Balance Card?
Zero balance card implements a credit card by which one credit cardholder can pay any balance owed in full. In this case, the cardholder doesn't need to add any extra charges.
Q. Should you use the secured credit card for your credit?
A secured credit card can act as collateral. This type of credit card is mainly used for a cash deposit.
Q. How can you get money by a balance transfer from the bank?
NEFT, cheques or demand draft are the processes that a bank uses for a balance transfer.
Q. How long does the balance transfer request take time?
At first, you need to check the card, whether it is new or not. If the credit card is not new, then it may consume up to one week. But if you have a new credit card, the balance transfer request may take up to one month.
Q. Which of these is beneficial– a balance transfer or a personal loan?
First, thou should think about whether you will be able to pay the amount within a few months or not. If you cannot pay the balance at the right time, then a personal loan is the best choice for you. Otherwise, if you can pay the amount within a few months, then you must choose credit card balance transfer. You should choose the personal loan instead of a balance transfer. You can do this if you see that the time may require one year or more than that to pay off the money.
Q. What to do if you have applied for a balance transfer on your credit card but haven't got any notification?
If you have faced such issues, then you need to contact customer care.
Q. Can a credit cardholder transfer money from one credit card to another of the similar bank?
No. One cannot transfer any money to a credit card account of the same bank. The credit card account must be of a different bank.
