Balance Transfer Credit Cards Meaning
Friends, today in this article we are going to learn about Balance Transfer Credit Cards Meaning. From the name of the balance transfer credit cards, we understand that the balance of these credit cards can be transferred from one card to another. By using this balance transfer facility the cardholder can pay the bill of any credit card to another credit card. The advantage of this is that the credit card bill payment is done as soon as possible and no interest is charged on the amount used, but it is only beneficial if the bill payment is made within 90 days. This facility is not provided by all banks but some banks are providing a balance transfer credit card facility.
Many times it happens that there is no money left on the debit card to pay the credit card bill. In such a situation, the question arises of whether one credit card bill can be paid with another credit card. The answer is yes and it is called a balance transfer. It happens when you have many credit cards but are in financial trouble. Then the bill payment is done by transferring the balance from one card to another card. Many banks offer this facility. Credit card bill payment from another bank is allowed by using one credit card.
What is the condition?
Banks generally do not allow balance transfers to other cards issued by the same bank. Apart from this, not all credit card holders get the benefit of this facility. A balance transfer transfers the loan from one card to another.
balance transfer credit cards meaning and process-
This card offers an outstanding balance transfer facility at low interest. It has some other benefits like zero percent interest for a specific period. That is, if the balance is transferred during that period and the outstanding balance is paid, no interest will be charged. Some banks also offer this facility with low interest. However, you have to pay a processing fee for the balance transfer. So before transferring the balance, calculate how much benefit you are getting.
How does credit card balance transfer work?
- Find out about your credit card balances, interest rates, and penalties
- Now look for a credit card that offers a low-interest bill payment facility
- Check your credit card limit so that you can clear your balance after a balance transfer
- Check the balance transfer fee and processing fee of that card and find out if it will allow you to pay the balance.
- If signed then apply for that card in the bank
- Now request for balance transfer and payment of dues from the bank
- Pay your dues in installments once approved by the bank
This type of card goes by the name of Bajaj Finserv RBL Bank Supercard. ICICI Bank Balance Transfer also provide a balance transfer facility. All banks charge interest differently. Therefore, before applying for this card, one should know about the interest, processing fees, and impact on credit score.
For balance transfer, money is taken from the credit card and sent to another card. The minimum amount limit is 2500 and a maximum of 75 percent of the credit card limit can be taken in a balance transfer. The bank from which the balance transfer is paid from the card, the bank charges you GST and processing fee. If you paid bills within 90 days then bank will not charged you do not do this, you will have to pay interest on the balance transfer money.
Beneficial for the payment of EMI –
You can opt for EMI to pay off the balance transfer after taking the money. You can withdraw as much as your credit card limit in balance transfer for bill payments. The limit of the card is Rs 50,000, so you cannot transfer more than Rs 50,000 balance from that card. If you choose the EMI option, you will have to pay interest. So check the interest rate while starting EMI on balance transfer. Don’t let taking money turn out to be an expensive deal.
Important things about using a balance transfer credit card-
* You can transfer the balance of this amount from the new credit card within its credit limit.
* Get complete details of processing fees for a balance transfer. Sometimes the processing fee may be higher, making your balance transfer more expensive.
* Interest rates on credit card balance payments are not applicable on new purchases. These transactions are based on the interest rates declared by the credit card issuing bank.
*Avoid using your credit card until you pay the balance transfer fee and pay all outstanding charges.
* After opting for a balance transfer, keep in mind the interest rate if you opt for Easy Monthly Installment (EMI) to repay the amount. Lest you have to pay more interest than before.
Balance Transfer Credit Cards Meaning