Managing our debt is essential to maintain healthy finances. So, it stands to reason that taking care of our credit card debt is important. There are plenty of easy moves you can do to reduce your debt interests. Performing a Balance Transfer (BT) is one of them.

Balance Transfers

BT essentially means moving the existing credit card balances to another card in order to enjoy a lower interest rate for a promotional period. You would have to apply to transfer the amount of your choice from card A to card B, as much as the credit limit of card B allows.

The lower interest offered by BT programmes make debt repayments more affordable. This helps with budgeting and allows finances to be better regulated as gradual repayments are priced at a lower interest rate. Let’s say you applied for a balance transfer with a rate of 7.77% per annum, you would be enjoying a certain amount of interest savings when compared to compounding interest of a normal credit card that could sit as high as 18% per annum.

However, even with a lower interest rate, some might still face difficulties paying off their card balances due to a lack of financial discipline or unexpected expenses. In these circumstances, a fixed repayment schedule offered by a structured instalment plan would be more helpful.

Citi Balance Transfer via Instalment Plan

Citi offers you exactly that solution. With Citi Balance Transfer via Instalment plans (BTI), your balance transferred from other banks’ credit cards can be converted into fixed agreed monthly instalments. In addition, this structured repayment plan also includes a few advantageous features such as:

• Zero fees – Zero upfront fees, zero processing fees and zero early settlement fees
• Optional tenure from 6 up to 36 months
• Flat Interest Rate (FIR) between 1.03% – 1.16%, equivalent to Effective Interest Rate (EIR) of 1.99% p.a.

In contrast with BT, which does not require a fixed repayment amount a month, Citi BTI plan encourages a disciplined behavior by having a fixed monthly instalment repayment for better financial management and nudges you into becoming a good paymaster. This way, you may avoid the risk of falling into bad financial habits or staying in unending debt.

How Much Would You Save Exactly If You Go for Citi BTI?

Take the below as an example:

• Customer is charged 18% per annum on outstanding credit card debt
• Customer pays the minimum payment every month
• Customer does not perform any additional retail spending

Option 1: Customer pays the minimum monthly repayment.

Normal Interest 18% p.a. at 12 months (RM10,000)

Month	Outstanding Amount (RM)	Monthly Interest (RM)	Principal Amount (RM)	Monthly Repayment (RM)
1	10,000.00	147.78	9,852.22	500.00
2	9,640.28	140.28	9,500.00	482.01
3	9,293.54	135.27	9,158.27	464.68
4	8,959.27	130.40	8,828.86	447.96
5	8,637.02	125.71	8,511.30	431.85
6	8,326.36	121.19	8,205.17	416.32
7	8,026.87	116.83	7,910.04	401.34
8	7,738.16	112.63	7,625.53	386.91
9	7,459.83	108.58	7,351.25	372.99
10	7,191.51	104.67	7,086.84	359.58
11	6,932.85	100.91	6,831.94	346.64
12	6,683.48	97.28	6,586.20	334.17
Total	–	1,441.55

Option 2: Customer chooses to perform a RM10,000 BTI with Citi for 12 months

With BTI 1.99% p.a. at 12 months (RM10,000)

Month	Outstanding Amount (RM)	Monthly Interest (RM)	Principal Amount (RM)	Monthly Repayment (RM)
1	10,000.00	16.58	833.33	849.92
2	9,166.67	15.20	834.72	849.92
3	8,331.95	13.82	836.10	849.92
4	7,495.85	12.43	837.49	849.92
5	6,658.37	11.04	838.87	849.92
6	5,819.49	9.65	840.27	849.92
7	4,979.22	8.26	841.66	849.92
8	4,137.57	6.86	843.06	849.92
9	3,294.51	5.46	844.45	849.92
10	2,450.06	4.06	845.85	849.92
11	1,604.20	2.66	847.26	849.92
12	756.95	1.26	848.66	849.92
Total	–	107.29

As illustrated above, by the end of month 12, a Citi BTI taker would have cleared his debt with a total interest of RM107.29 paid. In contrast, a non-taker of BTI would have paid RM1,441.55 of interest instead.

So if you are saddled with heavy debts on your credit card, you can cut down on your total payments by paying at a reduced interest rate if you go for Citi’s BTI plan with an exclusive rate of 1.99% p.a for all RinggitPlus customers!

Existing Citi card members should check out their official page to find out even more about Citi’s BTI plan. Offer valid until 31st July 2018, so hurry!
to find out more. Offer is valid till 31st July 2018!

 

• TAGS:
• Balance Transfer Plans
• Citi
• Citibank