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Compare all balance transfer credit cards

What is a balance transfer credit card?

  • A balance transfer credit card is a facility that involves transferring your current outstanding credit card debt to a new credit card which offers either a very low or even 0% interest rate. So the idea is for you to consolidate all of your credit card debt into one credit card that offers you a much lower interest rate.
  • Your payments will then go directly to the principal amount which you owe instead of you having to pay for more interest on top of the money you owe.
  • Balance transfers are usually offered over a time frame between 6, 9, 12 or 36 months for repayments.
  • However when choosing a longer time frame, such as 36 months, you would not get the 0% interest rate, but the interest rate will still be comparatively lower than the original interest rates on your previous credit card.
 
The advantages of a balance transfer
Why choose balance transfer?
  • Low interest rate - The main advantage of a balance transfer is the low interest rate or 0% interest rate depending on the amount of your transfer and the time frame for repayments. This will then provide you with lower monthly payments by consolidating all your credit card debts under one card.
  • Pay less monthly installments - For example: Sarah is currently paying RM10,000 on a credit card with an 18% interest rate. With a balance transfer to a credit card that charges 0%, or even one that charges 3% interest rate, she will be paying less on her monthly installments as a result of the lower interest rate.
  • Clear off debt faster - Aside from the lower interest rate, a balance transfer will also help you to clear off your credit card debt faster because of the reduced charges incurred.
  • Improve your credit score - This means that a balance transfer can provide you with a solution to clear off your credit card debt. Additionally, you can also improve your credit score with balance transfer, however this is provided you fulfill your monthly obligations diligently and promptly of course.

Things to look out for

  • Before you get excited there are a few important things you need to take note of so you don’t mess up the chances of clearing off your credit card debt. First up, make sure you’re aware of the details entailed.
  • For example a card may say they offer 0% for balance transfer but the fine print then states that for the first 6 months you get to enjoy 0% and then for the subsequent 6 months you will actually be charged 0.6% interest. So you need to know you will not get 0% interest rate on your transfer for a whole year with some cards, and definitely read all the fine print.
  • Next, you need to make sure you don’t make late payments because the charges would be exorbitant! That’s not the only bad thing to happen when you make late payments, as your credit card issuers could also revoke the promotional low interest rate on your balance transfer card if you fail to clear your debt during the allocated time. You will then end up paying higher late payment interest which usually is calculated based on the 18% interest rate.
  • There are also charges involved when you opt for a balance transfer such as upfront fees and balance transfer fees. Certain cards will also stipulate a minimum transfer for specific repayment periods. The time period and amount may also dictate if you do or do not get 0% interest rate. You should also know that the 0% interest rate is only for the amount transferred.
  • Additionally, the 0% interest promotional rate is only for your transferred balances. As for the new purchases you make using the card, you will still be paying interest on it, so make sure you don’t swipe your card on your shopping spree thinking it will be 0% interest rate.
  • Lastly, there is also a maximum cap per transaction depending on your credit card issuer along with the amount of balance transfer amount. This means that some credit card issuers will allow you to transfer balance from up to three other banks at one time, but a different bank may only allow transfers from two banks. So do take note that total amount may differ between credit card issuers.
  • Balance transfers can help you to clear off your debt at a low or even 0% interest rate but this is of course if you make sure you stay on top of your payments and be diligent with your payments.

Additional things to note about balance transfer credit cards in Malaysia

A debtor should be aware of the following points before transferring their balance to a different credit card.
Key features on balance transfer credit cards
Factors Description
Credit Card Limit
  • There is usually a cap that a debtor can transfer to another credit card. This cap depends on the credit limit of the new credit card.
  • To illustrate; A debtor has RM10,000 debt in Credit Card A and the credit limit in the new card, Credit Card B, is only RM8,000.
  • The debtor can only transfer a maximum of RM8,000 from his Credit Card A to Credit Card B.
Processing fee
  • Certain credit cards allow Balance Transfers at no fee charged but there are also banks that would charge a transfer fee or processing fee.
  • Such fees are usually a percentage of the transferred amount.
  • The fees might not be a huge dent to one’s wallet but it is definitely something to take note of to avoid surprise charges.
Closure of old account
  • It is a misconception that a Balance Transfer process automatically closes the account of the old credit card.
  • This is not the case and a credit card holder will need to manually deactivate the old credit card if they do not want to use it anymore.
  • It is advised for credit card holders to ring their banks and cancel their old credit cards to avoid unnecessary charges like GST charges and annual fee charges.
Depending on your credit score, you may be able to hold multiple credit cards. However, the number of credit cards you have and your repayment behaviour will affect your credit score. In 2011, Bank Negara Malaysia introduced a guideline stating that anyone with an annual income of RM36,000 or less can hold credit cards from a maximum of two issuers. Focus on choosing one or two credit cards which suit you and your requirements best. Eventually, if you prove your good repayment behaviour, you will be offered a higher credit limit.
As long as you pay your credit card in full and on the date in your credit card statement, you do not have to pay interest on your credit card.
In order to be eligible for a credit card in Malaysia, you need to be at least 21 years old and financially stable. Each credit card issuer has its own minimum annual income requirement. In most cases, a minimum annual income of RM24,000 is required, but this could vary from bank to bank. You don't need to have an existing account with a bank to apply for a credit card from them. Remember to always research the best credit cards before applying!
If you're earning an annual income of RM36,000 or less, the maximum limit extended to you will not exceed twice your monthly income for every credit card issuer. This guideline does not apply if you are earning more than RM36,000 per annum, so you should consult your credit card issuer in Malaysia to find out how much your credit limit will be. Your credit limit can also be raised if you show good repayment behaviour. You can talk to your credit card issuer about raising your credit limit.
You can call the bank to ask for a review in your application. However, approval for an increase in credit limit is usually determined on your credit score. By being prompt in paying your monthly bills, the bank might increase your credit limit.
Choose a credit card that complements your lifestyle. Cashback cards help you save on groceries, petrol, and dining. Air miles cards let you earn miles for every RM1 you spend, which you can redeem for free tickets. Rewards cards let you earn points for every RM1 you spend, which you can redeem for vouchers. By using our comparison tools, you can quickly see which credit card has benefits that are most useful to you. Make sure to compare annual fees and effective interest rates so you know what extra charges apply.
Credit card issuers provide various methods of payment, from online banking, paying through telephone or mail, or visiting a branch of the bank to settle the balance. The most convenient method is to create a bank account and have credit card balances deducted automatically every month.
The processing time varies depending on the card issuer, but as soon as your application has been approved, it normally takes 7 to 10 working days until you receive your card. Make sure that you submit all the relevant documents so that your application can be processed as quickly as possible.
If you suspect an unauthorised transaction has been made on your account, check if you made any other purchases on the same day before contacting your bank. The item could have been mistakenly billed under a different name. Also, ask anyone who uses the card with your permission (such as your partner) if they made the purchase. Once you have confirmed that the transaction was unauthorised, contact your credit card issuer immediately. Credit card issuers provide 24/7 customer service to address these matters, so do not hesitate to take immediate action. Failure to do so could make you liable for the unauthorised transactions charged to your credit card.
The minimum payment is a sum that you will have to pay each month in order to avoid getting a bad credit score. It is calculated according to your outstanding balance, and will appear in your monthly statement. Other factors that will affect your minimum payment are unpaid balances or any balances that exceed your credit limit. If you pay the minimum amount on your monthly bill, there will still be interest charged to any unpaid amount. This will be carried on to your next statement. However, if you fail to pay the minimum fee, a late payment fee will be charged to you, on top of the interest on the outstanding balance.
An annual fee is also known as a maintenance fee that is charged annually by your credit card provider. Some banks waive off annual fees depending on cards and promotions.