A balance transfer means moving your credit card debt to a different card that charges little to no interest for a set period, usually 6 to 12 months. You apply for this new card, the bank transfers your debt over, and then you pay it down while the promotional rate is active. More of your monthly payment goes toward clearing what you actually owe instead of just covering interest charges.

Paying off RM10,000 in credit card debt at 18% interest costs around RM2,000 in interest. With a balance transfer, you could reduce that to RM300 in fees.

Beware, you’ll pay an upfront processing fee (typically 3% of the amount you transfer), and if you haven’t cleared most of the debt by the time the promotion ends, you’re back to paying 15-18% interest again.

Understanding The Processing Fee

Balance transfers aren’t free. Most Malaysian banks charge a processing fee on the amount you’re transferring. Maybank charges 3% for their conventional Balance Transfer and their Shariah-compliant Balance Transfer-i option, while other banks may charge differently. Some like CIMB occasionally offer promotions with no processing fee.

For example, if you’re transferring RM10,000 with a 3% processing fee, you’ll pay RM300 upfront. This fee gets added to your transferred balance immediately, so you’re actually starting with RM10,300 in debt.

Some banks let you pay this fee separately instead of adding it to your balance. If you have the cash, pay it outright. Otherwise, you’ll be paying interest on the fee itself once the promotional period ends.

How To Calculate Your Savings

While banks provide calculators on their websites, doing your own maths gives you a clearer picture. When you run the numbers manually, this is what it looks like:

Current Card vs Balance Transfer

	Current Credit Card	0% Balance Transfer
Debt Amount	RM10,000	RM10,000
Interest / Fee	18% p.a.	0% for 12 months
Processing Fee	–	RM300 (3%)
Monthly Payment	RM500	RM860
Time to Clear	24 months	12 months
Total Interest / Fees	RM2,000	RM300
Total Amount Paid	RM12,000	RM10,300
Savings	–	RM1,700

Note: Credit card interest is calculated daily, but for payoff estimates, we use the equivalent monthly rate. The difference is minimal when you make fixed monthly payments, and this method reflects the real repayment timeline.

If you run the same numbers but only pay RM500 monthly, you’ll still owe RM4,140 when the 12 months are up. At that point, the regular interest rate of 15-18% kicks back in. You’ve spent RM300 in fees and you’re still carrying most of the debt.

The maths only works if you can clear most or all of the debt during the promotional period.

Getting The Transfer Done

Balance transfer applications aren’t instant. Processing typically takes 5-14 working days, sometimes longer if the bank needs additional documents.

During this waiting period, you must continue making payments on your original card. If you miss a payment thinking the transfer is already done, you’ll incur late fees and interest charges. Continue paying the old card until you get written confirmation that the transfer is complete.

What Happens To Your Cards After Transferring

Your original card doesn’t close automatically. The debt disappears from it, but the card account stays open unless you specifically request closure.

Many people assume they should immediately close the old card, but think twice. Closing it can hurt your credit score by reducing your total available credit, which makes any remaining debt on other cards look proportionally larger.

If you’ve had the card for less than 12 months, closing it won’t affect your credit score much. But if it’s an older card with a longer history, keeping it open helps your overall credit profile.

Most people sabotage themselves at this stage. The old card sits at zero balance with the full credit limit available. The new balance transfer card usually comes with its own credit limit beyond the transferred balance. The temptation to use either card is real, but don’t. Otherwise, you’ll just end up with debt on multiple cards instead of solving the original problem.

If you’re serious about clearing debt, go cash or debit only until you’re done. If you absolutely must have a card for emergencies, keep one with a low limit that wasn’t involved in the balance transfer.

What Happens If You Miss A Payment

Balance transfers can become traps instead of solutions.

Miss a payment during the promotional period and most banks will:

• Cancel your 0% promotional rate immediately
• Apply the full interest rate to your entire balance as if the promotion never existed
• Charge late payment fees (typically RM10 or 1% of the outstanding balance, whichever is higher, up to a maximum of RM100)
• Report the late payment to credit bureaus

That “0% for 12 months” deal only exists as long as you make every single payment on time, in full, by the due date.

Late payments stay on your CCRIS report for 12 months and on your CTOS report for 24 months. This will affect your future loan applications, potentially costing you thousands in higher interest rates or outright rejections.

Set up automatic payments from your bank account for at least the minimum amount (typically 5% of your outstanding balance or RM50, whichever is higher). Even if you plan to pay more, the auto-payment ensures you never accidentally miss the deadline.

What About Paying Off Early?

Most banks allow early settlement, meaning you can pay off the entire remaining balance before the promotional period ends. Some banks even waive early settlement fees entirely.

Some banks charge early settlement fees that can go up to RM100. If you’re planning to clear your debt in three months but took a 12-month plan, that fee might eat into your savings.

Check the terms before you sign up. If early settlement is free, there’s no downside to choosing a longer promotional period as insurance. If there’s a fee, calculate whether paying it still saves you money compared to your current interest charges.

Before You Apply, Ask These Questions

What’s the minimum transfer amount?

Many banks set minimums ranging from RM1,000 to RM3,000 depending on the plan. If your debt is smaller, you might not qualify.

What happens if I need to transfer again?

While it’s possible to do multiple balance transfers, this approach has drawbacks. Each transfer costs you in processing fees, and if you’re applying for new cards with different banks each time, each application counts as a new credit inquiry that can affect your credit score. 

When A Balance Transfer Makes Sense

Balance transfers work best if you’re already managing your debt responsibly but want to pay it off faster. If you’re struggling to make minimum payments or regularly max out your cards, a balance transfer won’t fix the underlying problem. You need to address your spending habits first. We have practical guides on paying off credit card debt and managing debt without breaking your budget that can help.

If you’re past that stage and ready to tackle your debt seriously, consider a balance transfer when you can pay off at least 80% of the debt during the promotional period, when the processing fee is less than three months of interest on your current card, when you have steady income and a decent credit score to commit to fixed monthly payments, and when you’re serious about not adding new charges to any card.

Your Debt Exit Plan

Calculate your monthly payment first. Then see if a balance transfer makes that payment more effective. If the answer is yes, and you can commit to the discipline required, compare your options.

Use the RinggitPlus comparison tool to see current balance transfer rates from Maybank, CIMB, Hong Leong Bank, and more.

Not ready to commit yet? Start by paying more than the minimum on your current card for two months. If you can maintain higher payments consistently, then revisit a balance transfer to accelerate your progress.

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