Reducing Credit Card Debts with 0% Balance Transfers
Author Avatar

 

Using a credit card for daily expenses can garner us a huge load of rewards but could also be our downfall if we let the expenses spiral out of control.

Wouldn’t it be rather beneficial if you could reduce the interest and stagger the payments over months if the amount is too large to settle at one go? Or even better, use a credit card to pay off another credit card? If you like that idea maybe you should look into a balance transfer.

Reducing Credit Card Debts with 0% Balance Transfers

What is a Balance Transfer?

Balance transfer essentially takes the existing debt on one card and moves it to another card, provided your credit limit is sufficient. Of course it is not as simple as swiping the card on your next bill and paying off the balance.

You would have to apply to transfer the amount of your choosing, along with a selected tenure. The amount being transferred will be subjected to a new and lower interest rate or a processing fee. The sum being transferred will have to be in accordance to a minimum amount stipulated by the bank as well.

Once the amount has been approved, you will then make staggered payments in accordance to the agreement, depending on if your balance transfer has fixed payments or flexible payments.

How Does it Reduce Debt?

Using a balance transfer programme makes it easier to make repayments as they are broken down over a certain period and incorporates lower interest to make it affordable. This in turn will eventually help your budget and finances fall back into a better regulated form as you gradually make payments.

Instead of making partial payments and serving the interest on all the remaining balance of your credit card, you can take advantage of a lower interest rate and enjoy significant savings. Some balance transfers go as low as 0% interest per annum, however the bank may impose a processing fee instead.

Even if you picked out a balance transfer with a rate of 7.77% per annum, you would still be enjoying a certain amount of savings when compared to compounding interest of a normal credit card that could sit as high as 18% per annum.

The table below displays the balance transfers which currently have a 0% interest rate and the minimum amount required for each of these banks.

For a full list of balance transfers check out our comparison tool and apply for a credit card that has the right balance transfer feature for you to take advantage of.

If you have any tips and tricks for reducing credit card debts, feel free to let us know in the comments below.

 

0 0 votes
Article Rating

SHARE

Comments (0)

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Top Balance Transfer Articles
Top Balance Transfer Articles
Post Image
Best Balance Transfer Plans In Malaysia
Alex Cheong
- 17th June 2021
(Article updated on 17 June 2021.) Even during regular days, credit card balance transfer programmes are a good […]
Post Image
Frequently Asked Questions About Credit Cards
Guo Heng
- 28th June 2018
Do you have questions about credit cards or are you looking to apply for your first credit card? Check out our FAQ on credit cards for all the need-to-know information.
Post Image
Public Islamic Bank Platinum & Gold Credit Cards Review: A Timely Revamp
Jacie Tan
- 22nd April 2021
Public Islamic Bank (PIB) has recently revamped the four credit cards in its repertoire, namely the Public Islamic […]
Post Image
How Do Balance Transfer Credit Cards Work? Here Are The Best Deals.
The RinggitPlus Team
- 5th December 2018
If we said that Banks are giving away free money you’d say we’re crazy, right? Wrong. Used wisely a Balance Transfer credit card can save you a fortune in interest. Some cards offer 0% interest over a short contract term.

Related articles

Related Posts Image

Best Balance Transfer Plans In Malaysia

Jacie Tan -
2nd February 2021
Related Posts Image
Related Posts Image
Related Posts Image

Dealing with the Raya Overspending Aftermath

Jacie Tan -
2nd February 2021