Top 4 Balance Transfer Credit Cards in India for 2024; see details here

Credit cards are a great tool for managing finances. Not only do they make life easier due to their ease of use, but they are also very rewarding if used in the right way. In addition to the ease of spending and earning rewards, credit cards are a great way to build credit scoreGet facilities like lounge access, free movie tickets and golf lessons, among many other benefits.

There are credit cards that can also provide enough points and miles to earn free stays at five-star hotels or fly business class internationally. However, there are situations in life when you may find it difficult to pay your credit card bills on time, which could be due to unexpected medical expenses or job loss.

A temporary solution for this burden provided by many credit card issuers is called balance transfer. This option allows you to transfer your outstanding balance to another credit card that offers a promotional period with zero or reduced interest rates, giving you more time to manage your cash flows and pay off the membership fee.

Certain benefits of using balance transfer feature as follows:

1. It can reduce the cost of credit card loans. If you don’t pay the outstanding amount on your credit card, it can cost you 36% to 48% annually.
2. Balance transfer could give you additional interest-free periods for a minimal cost.
3. It might give you some time to figure out how to make the balance payment.

Obviously, the balance transfer service is not without disadvantages. There are certain things you should keep in mind, such as:

1. There may be a flat balance transfer fee charged by the credit card issuer.
2. There may be a monthly charge on the transferred balance.
3. It will affect your credit score as balance transfer requires a thorough investigation of your credit score.

Before you make a balance transfer, keep in mind that there is usually a processing fee. Therefore, it’s important to first determine how much you’ll actually save overall. For the transfer to be worth it, your savings must be greater than the fees and any other costs the transfer may entail. It’s a good idea to do a quick comparison of costs and savings ahead of time to make sure it benefits you.

Let’s take a look at some of the card issuers that can offer balance transfer services at the lowest possible cost:

SBI credit cards

There are two SBI plans that provide balance transfer. The former has a flat 2% processing fee and a 60-day repayment period with no further interest and the latter allows you to pay within 6 months at a monthly interest rate of 1.7%. You can apply online or by calling customer service. Some cards where balance transfer is available are SBI Elite card, SBI Octane, SBI Club Vistara, among others.

RBL Bank

You can transfer the balance to RBL Bank credit cards. The cheapest option is when you agree to make payment within 3 months which has a 2.99% processing fee subject to a minimum charge of $750. This facility is available with all RBL cards.

Kotak Mahindra Bank

Another bank that only has a processing fee but no fixed interest cost. The maximum transfer allowed is 75% of your credit limit. It is necessary to have an active card for more than 6 months. There is a charge of $349 per 10,000 of transferred balance.

ICICI Bank

You can transfer a minimum amount of $15,000 and maximum amount of $3 lakhs with ICICI bank. Charges are shared at the time of application.

The balance transfer feature can be obtained with all credit cards from the providers mentioned above. You must already have a credit card to use the facilities. Response time may be longer if you apply for the card at the same time you wish to complete the balance transfer service.

Conclusion

Lastly, I do not recommend anyone to use this facility. If you ever find yourself in a situation where you have to use this service, it clearly means that you are not managing your finances well. Credit cards It should be used as a tool to manage cash flows, have an interest-free period, optimize discounts and offers, and earn reward points on spending. It should not be used as a borrowing tool. If you’re unsure about using credit cards, work with a financial advisor to understand the state of your finances and act on their recommendations.

Nishant Batra, Co-Founder, Holistic Prime Wealth Private Limited