{"id":3621,"date":"2025-04-02T11:01:27","date_gmt":"2025-04-02T03:01:27","guid":{"rendered":"http:\/\/www.imoney.my\/articles\/?p=3621"},"modified":"2025-04-02T12:40:34","modified_gmt":"2025-04-02T04:40:34","slug":"credit-card-transfer-guide","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/credit-card-transfer-guide","title":{"rendered":"How To Apply For A Credit Card Balance Transfer"},"content":{"rendered":"

High credit card usage can put you in financial trouble. According to Credit Counselling and Debt Management Agency (AKPK), credit card debts were the agency’s most restructured credit facilities<\/a>.\u00a0 This made up 47% of those who registered in AKPK’s Debt Management Programme.<\/p>\n

If you\u2019re struggling with credit card debt, one of the solutions you can turn to is a balance transfer plan. Ironically, this involves clearing off your credit card balances\u2026with another credit card. This can be a good tool for saving on interest payments, but it must be wielded cautiously.<\/p>\n

<\/span>What is a balance transfer?<\/span><\/h2>\n

A balance transfer plan helps you transfer your debts on an existing credit card to another credit card at a new bank, at a lower interest rate starting at 0%.<\/p>\n

However, the lower interest rate is only applicable for a promotional tenure (e.g. 6 or 12 months). This means that you\u2019ll have to clear your debts on your new credit card within a short amount of time to enjoy the lower interest rate, otherwise your balance will be charged at the prevailing interest rate, which can be around 15%.<\/p>\n

<\/span>How can a balance transfer help you save money?<\/span><\/h2>\n

A balance transfer\u2019s lower rate helps you save money, because you\u2019ll get to pay lower (or zero) interest on your balance during the promotional period. Let\u2019s look at an example:<\/p>\n

\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t
<\/td>Without balance transfer<\/th>With balance transfer<\/th>\n<\/tr>\n<\/thead>\n
Balance<\/td>RM10,000<\/td>RM10,300
\n
\n(balance + 3% upfront fee)<\/td>\n<\/tr>\n
Interest rate<\/td>18%<\/td>0%<\/td>\n<\/tr>\n
Monthly payment<\/td>RM957.58 x 12 months<\/td>RM858 x 12 months<\/td>\n<\/tr>\n
Total payable<\/td>RM11,491<\/td>RM10,300<\/td>\n<\/tr>\n
Savings<\/td><\/td>RM1,191<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\nFigures are for illustrative purposes only<\/em><\/p>\n

In the example above, instead of paying a 18% interest rate on your balance, you\u2019ll be paying a 0% interest rate. This saves you around RM100 a month, or RM1,191 in a year.<\/p>\n

<\/span>How to apply for a balance transfer plan<\/span><\/h2>\n

If you\u2019ve already compared the plans offered by different banks and have done the math to know that this can benefit you in the long run, here are the steps you\u2019ll need to take.<\/p>\n\n\n\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t
1<\/strong><\/td>Make at least the minimum payment on your latest bill.<\/td>\n<\/tr>\n
2<\/strong><\/td>Visit your new bank with a copy of your latest credit card statement. Create a plan to pay off the balance you are transferring over with the staff who is assisting you. Make sure you understand all charges, interest rates and terms. Sign up for your new card and complete the balance transfer form.
\n
\nAlternately, you can do this online. Check your new bank\u2019s website for details on how to apply for a balance transfer.<\/td>\n<\/tr>\n
3<\/strong><\/td>While waiting for confirmation from your new card company, make sure you continue to make at least the minimum payment on your old card during the due dates.<\/td>\n<\/tr>\n
4<\/strong><\/td>Receive confirmation of your new account and a notice of the balance transfer.<\/td>\n<\/tr>\n
5<\/strong><\/td>Check that the amount transferred is reflected on your old account. If you\u2019ve transferred everything to your new card, the latest statement on your old card should have zero balance.<\/td>\n<\/tr>\n
6<\/strong><\/td>If needed, terminate your old card. But make sure you read and understand the terms and conditions for cancelling your old credit card.<\/td>\n<\/tr>\n
7<\/strong><\/td>Your balance transfer has been a success. Continue paying monthly instalments to your new card to avoid any nasty surprises!<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

<\/span>Watch out for these balance transfer fees<\/span><\/h2>\n

While a balance transfer can sound like a good idea, you\u2019ll want to watch out for these fees that can offset your interest savings:<\/p>\n