Balance Transfer on Credit Cards

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Its been a while since i wrote an article and i blame that to my busy schedule, nevertheless this article will give you information about Balance Transfer facility offered on Credit Cards.

Balance Transfer as the name suggests is transferring your Credit Card outstanding from one Bank to another, this happens via a managers cheque or a wire transfer from the Bank who is intending to take on the liability.

For Eg: If a person X has 3 cards; one from Citi Bank, Standard Chartered Bank and one from Barclays and he intends to have only one Credit Card outstanding (provided he has not utilized his card limit fully on all cards), he approaches Citi Bank and requests them to issue a Balance Transfer from his Credit Card to Standard Chartered and Barclays each. The Bank accepts his requests and issues him the cheque or sends the money to his cards in the respective Banks as per his instructions.

Once the money reaches Standard Chartered and Barclays, his credit card outstanding will be reduced to the extend of money transferred from Citi and his liability will increase with Citi to the extent of cheques/wire transfers issued.

The basis question would be why would a person transfer his balance between banks when he can clear the outstanding individually with all Banks. The answer to this would be; Banks sometimes provides an offer to provide Balance Transfer free of any interest for 3 months at a nominal processing fee. By availing this offer customer can enjoy "0" percent interest on his balance transfer credit card outstanding for 3 months and if he is able to clear the outstanding in the given period no interest will be levied by the Bank.

Further products offered by the Bank in terms of Credit Cards and Loans will be shared with you in my coming blogs, stay tuned.................