Credit Cards are merely not just plastic money any more, but offer you an array of credit facilities that make your life easier. One of these is the balance transfer facility which allows a card holder to clear his credit dues on one card by transferring them to another card. Let's find out how this facility can be availed and whether it's a suitable option for you.
What Is It?
Balance transfer facility available for select credit cards allows its holder to transfer a pending amount owed on one card to another card, provided the second card has a credit limit higher than the money owed.
Documents Required
Some premium card holders may not require any additional procedures or documentation to avail this facility but other cards may need to be supported with additional documents. These may be
- Credit card photocopies
- Last 3-6 credit card bill statements
- Address proof
- While balance transfer is a convenient facility to use there are some key things to keep in mind when availing it.
- You can only transfer that amount to your new credit card which is within its credit limit
- One must be wary of processing fees. At times, the processing fees might be very high, making you shell out more than what you might have if you had continued with your existing card
- The lower interest rate for credit card balance is not applicable to new purchases as these transactions fall under standard interest rates offered by the credit card issuer
- Refrain from using your credit card until all balance transfer payments are paid and all subsequent charges are cleared
- Some lenders may offer an EMI mode of repaying your credit card balance when you opt for balance transfer. You need to check the interest rate as well as the terms and conditions and not blindly choose to do the transfer just because the option of instalments is being given.
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