Credit Card Balance Transfer in India

Cardholders may sometimes face one or more credit card debts that they are not able to pay at once. In this case, they may transfer the entire outstanding amount from all the credit card accounts to a single account. The balance transfer credit card that consolidates the outstanding amount usually charges a much lower interest rate as compared to the finance charges. Do note that certain card providers even offer 0% interest rate for a limited period.

Reduced Financial Strain – Balance transfer credit cards charge a significantly lower interest rate when compared to finance charges. Credit card finance charges (interest rates) are about 3.5% p.m. while the interest rate on a balance transfer is usually around 1.8% per month. Some card providers may also offer 0% interest rate. Lower interest rate means lower financial burden.

Stabilize Credit Score – Lowered interest rates will make it easier for the cardholders to make payment and hence stabilize their credit score. They can even improve it with timely payments.

Interest-Free Period – Credit card providers offer an interest-free period on new purchases post balance transfer as well. This way customer can make new purchases without incurring interest rate on it.

Other Benefits – Credit card providers sometimes offer teaser rates or other introductory offers to customers. These benefits may include longer interest-free periods, low interest rates, etc.

Processing Fee – Customers will be charged a processing fee for a balance transfer that can range anywhere between 1% and 3%. Some banks may also charge a flat fee.

Interest Rate – The interest charged on Balance Transfer can be 0% for a certain period. But, the interest rate is usually around 0.75% and may go up to the particular credit card’s finance charge.

The interest rates and processing fee charged on some popular credit card issuers are shown in the table below:

Bank	Interest Rate	Processing Fees
HDFC Bank	Shared at the time of application	1% of BT amount/Min. Rs. 250
Axis Bank	Starts from 12% p.a.	1.5% of BT amount/Min. Rs. 250
ICICI Bank	Shared at the time of application	Shared at the time of application
Kotak Bank	0% interest option available Rest shared at the time of application	Rs. 349 per Rs. 10,000 BT amount
RBL Bank	0% interest option available Starts from 11.73% p.a.	2.99%/ Min. Rs. 750 for 3 month option Rs. 499 for 6 & 12 month option
SBI Card	0% interest option available Starts from 9% p.a.	Nil processing for certain plans Rest shared at application time

Cardholders who are carrying significant amounts of debt at a high interest rate may apply for a balance transfer. This will help them pay off the debts without incurring hefty charges.

Do note that balance transfer is best suited when the user can pay off the due amount within a few months. If he finds that it will take longer than a few months, perhaps a year or two, then a Personal Loan will be better suited.

Cardholders can apply for the credit card balance transfer via Netbanking, contacting customer care, through SMS, etc.

However, those who want to apply for a new balance transfer credit card must meet the eligibility criteria set by the particular bank for that particular card variant. Details about the eligibility criteria and documentation can be found here. Proof of identity, address and income will also be required at the time of new credit card application.

How will I get my balance transfer amount?
Banks may send the amount via NEFT, cheques or demand draft.

How long does it take to process the balance transfer request?
If you are transferring the amount to an existing credit card then the request may be processed within a week. If you are applying for a new credit card on which you want to avail the balance transfer facility. Then it may take up to a month to process the request.

Should I go for a balance transfer or apply for a personal loan?
If you find that you can repay the amount within a few months then balance transfer is a better choice. However, if you find that your debt is significantly higher than your current credit card limit or it might take up to a year or more to pay off the amount then you may apply for a personal loan.

I have applied for a balance transfer on my credit card but I haven’t received any notification?
In this case, you should contact the customer care cell of the bank where you applied for the balance transfer.

Can I transfer balance from one credit card to another one of the same bank?
No, the balance can be transferred to card account of a different bank only.