All About Credit Card Balance Transfer Explained Here
Credit Cards are one of the most popular financial products in India. The extent of their popularity can be gauged from the fact that almost every tax paying an individual in India would have at least one credit card to their name and would happily apply for new Credit Card online.
Credit Cards are unique from other financial products. With the increasing popularity of e-commerce and digital payments, Credit Cards have become one of the most preferred modes of online payments due to various cashback and promotions available on their usage.
Credit Card Debt
But managing Credit Card debt is one of the trickiest financial tasks and requires excellent situational awareness. Credit Card debt is basically the amount you owe to the bank against purchases made in a month. Credit Cards usually provide a zero-interest period,but if the whole amount is not paid during that period, interest is charged against the outstanding balance, which could range from 24% to 48% p.a. depending on the issuing bank. If you are not careful about your Credit Card debt, not only would it ruin your credit score but would also burden you under a mountain of debt. It becomes a vicious circle which is hard to break.
If you are also facing such a situation, then you should consider the option of Credit Card balance transfer.
Credit Card Balance Transfer
As the name is self-explanatory, Credit Card Balance Transfer means transferring the amount owed to a particular card to any other card. As such, the amount owed to the issuer of the first card is paid by the second card,and the amount is then payable to the second card issuer. One of the main reasons for Credit Card balance transfer is the availability of lower interest rates, which significantly reduces the interest burden against the Credit Card debt.
The Process of Credit Card Balance Transfer
You must undertake the process of Credit Card Balance Transfer only if you are getting the benefits of lower interest rates. Otherwise, it does not make any sense. You can only transfer that much amount to a new card, as much is the credit limit on the newly issued card. Below mentioned is a brief process of the balance transfer:
- Identify the Credit Card to which you want to transfer the balance.
- Apply for a New Credit Card Online through MyMoneyMantra or card issuer’s website or fill the form by visiting the branch.
- Submit the required documents along with a statement of an outstandingCredit Card.
- The new card issuer will issue a demand draft towards payment of your existing debt,and you will get a new Credit Card.
- Your new card’s limit would be the sanctioned limit minus the Credit Card balance transferred.
Points to Remember
When you apply for Credit Card balance transfer, there are a few points that you must remember:
- The lower interest rate is applicable only for a specific duration; thereafter normal interest rates would be applicab
- Your available credit limit would be the total approved limit minus the balance transferred.
- The lower interest rates are only applicable to the amount transferred; new purchases would attract the standard rate of interest.
- This facility is only available if you have been using the particular card for more than a year. This is to prevent card hopping from customers.
Benefits of Credit Card Balance Transfer
Credit Card Balance Transfer offers a vast array of benefits if you use this facility judiciously. Do not go for any unrealistic looking offers, always conduct thorough research and then only take a decision. Some of the most significant benefits of Credit Card Balance Transfer are:
- Lower Interest Rate: Credit Card balance transfer is available at much lower interest rates than prevailing interest rates on new Credit Cards. You can lower your interest burden on the amount due by transferring it to a new card and save a lot of money.
- Moratorium Period: When you transfer your Credit Card balance to a new card, you get a moratorium period during which you need not pay any interest. This way you can repay your Credit Card debts without any interest burden.
- Get Rid of Credit Card Debt: This is one of the most effective ways of getting rid of the accumulated Credit Card debt. As your interest burden is lowered, you save a lot of money on interest payments.
- Quick Processing: As you already have a card, you need not furnish any additional details or documents to get the new Credit Card.
- Debt Consolidation:You can transfer outstanding amounts from one or more Credit Cards into one new balance transfer Credit Card. This will help you pay-off your Credit Card debts more conveniently.
If you use your options smartly, you can use the Credit Card balance transfer facility to break the vicious circle of high-interest rates and organize your personal finances effectively.
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.