Credit Card Balance Transfer

Credit Card balance transfer is a technique used to transfer high-interest debts from one credit card issuer to another one which in comparison offers lower interest rates. This is frequently used as a way to save money on interest, also it makes it faster to reduce the debt burden.

When one makes use of credit card balance transfer facility, the bank to which the amount is being transferred pays the former credit card bank the complete amount and sets monthly payments for you to pay the debt at a much lower rate.

There are many benefits to using credit card balance transfer facility and these are as follows:

Simplified Payments

You can consolidate many credit card payments from different cards through balance transfer to avoid forgetting about the payments. It is easier to remember and make one payment instead of many payments. This will save you any late payment charges that may be levied due to delayed payments.

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Better Interest Rates

By making use of the balance transfer facility offered by many banks, you have an option to choose from a wide array of interest rates and choose the best rate being offered to you.

Better offers on Credit Cards

When you transfer your debt balance to another bank, you also sign up for that bank’s credit cards hence will be able to avail better offers from the credit card, which your present issuer may not be providing like no annual fees, extended grace period etc.

Extra time to pay off debt

Some companies also give you extra buffer time before you start paying the EMIs. This offers credit card holders time and temporary respite from the accumulated debt.

Some points to Remember:

1.  Credit transfer is not repaying the loan

It is imperative to understand that you still need to pay the amount that you owe to your former credit card issuer, the only difference is that you will have to pay it at less interest. Hence, it is not a way of repaying rather a way to just get some extra time and lower interest rates to make the payments.

2.  Few charges still might be levied

There are certain charges that are applicable, and you cannot escape them. When you transfer your credit card balance to another credit card issuer you may still need to pay these charges. The new issuer may offer you exceptional or promotional interest rates in the beginning, but they will certainly wear off after some time.

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3.  You need a good credit report to avail it

It is essential for you to have a good credit report with credit utilization of only 30-40%. Unless these conditions are met one will not be able to make use of the balance transfer facility.

If you have used the balance transfer facility multiple times, there is a slight chance that it may leave a dent on your credit report as well.


One should do a thorough analysis of the fees and charges that are going to be applied thus ensuring that he/she can make use of the best deals and offers in the market. This is an excellent technique to save money on high-interest credit cards and also to get more time to pay off the credit card debt.

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