Credit cards have become a part of our daily lives, and you can save a significant amount of money if you pay their bills on time. Making payments on time helps avoid costly late fees and interest charges. 

Cardholders who own multiple cards often consider using another credit card to make payments for a credit card in hopes of earning rewards or simplifying finances. But this isn’t a good idea, as it can lead to unmanageable debt, even with a lifetime-free credit card. 

What Is Credit Card Balance Transfer?

Direct credit card-to-credit card payments are generally not permitted by issuers, regardless of the type of card—be it a regular, secured (FD-backed), or lifetime free variant. Instead, an indirect method known as a balance transfer is available through many banks. 

A credit card balance transfer moves debt from one card to another. Cardholders usually opt for this option when they have a credit card bill to pay off. Moving the debts from a higher interest rate credit card to a lower interest rate credit card helps make the repayment process more manageable. 

To further ease the burden, some issuers offer the option to convert the transferred amount into EMIs with flexible terms. However, balance transfers often come with associated fees and specific conditions. It’s important to understand these charges and terms in detail before proceeding to ensure they truly benefit your financial situation.

Things to Consider

If you’re paying high credit card interest, switching to a lower-rate card can help you make huge savings. However, before making the move, keep these factors in mind:

• Transfer Fee: Banks usually charge a fee of 0.99% to 3.75% of the amount you transfer
• Costs and Savings: Make sure the money you save on interest is more than the fee you pay to transfer
• Effect of Late Payments: Paying late can cancel the low-interest offer and lead to high charges
• Impact on Credit Score: Your score might drop a little due to a new account or higher credit use
• Credit Limit Consideration: Don’t let the transfer push your balance too close to the new card’s limit
• Limited-Time Low Rates: Low interest rates usually last 6 to 18 months, then standard rates apply

Step-by-Step Process to Apply

The process is simple, but knowing the steps in advance helps:

• Step 1: Check how much you owe and the interest rates on your current credit cards
• Step 2: Apply for a new card that includes a balance transfer offer and ask for a transfer during the application. If using an offer on an existing card, follow your bank’s process -most banks let you submit your requests through their app or online banking
• Step 3: Look for a card with low or 0% interest, minimal or no transfer fees, and a long promotional period
• Step 4: Calculate how much to pay each month to clear the balance before the promo period ends. Since this amount is often higher than the minimum payment, use a balance transfer calculator to stay on track
• Step 5: Once approved, transfer your balance using online banking, a mobile app, or customer service. Keep your old card’s details ready, including the account number, balance, and billing address

Benefits of Credit Card to Credit Card Balance Transfer

Beyond just saving on interest, balance transfers can offer a range of benefits that help you take control of your finances. These include:

• Earn reward points for every credit card payment you make
• Pay on time to avoid late fees and maintain a high credit score for better loan and card offers
• Transfer to a lower-interest card to reduce costs and pay off debt faster- choosing a lifetime-free credit card can make it even more cost-effective
• Manage your credit card debt more efficiently with better planning and discipline
  

Drawbacks of Credit Card to Credit Card Balance Transfer

While credit card balance transfers can be a smart way to save on interest and consolidate debt, they’re not without their pitfalls. Here are certain disadvantages:

• Pay transfer or cash advance fees for balance transfers 
• Pay more if you don’t repay within the promotional period – higher interest rates kick in, increasing your financial burden
• Manage multiple cards carefully, as using another card to pay off debt requires disciplined tracking and planning
• Risk falling into a debt trap if you don’t have a solid repayment plan

Credit card-to-credit card payment can be a helpful strategy if the new card offers a lower interest rate. It allows you to save on interest and repay the amount through convenient EMIs, making it a better option than incurring late payment fees or missing payments altogether. However, since this is an indirect method, it should be considered only when no better alternatives are available.

Before proceeding, compare different issuers in the market and carefully review their fees, terms, and conditions. This will help ensure the balance transfer doesn’t lead to further debt down the line. 

Consider choosing the One Credit Card for its impressive features and everyday savings. It allows you to access instant cash through OneCash, helps you convert large bills into EMIs, and you can earn 5X reward points on your top two spending categories each month.

 

Manage everything effortlessly through the feature-rich OneCard App, designed for a smooth user experience. The card charges only a 1% monthly fee of the total transfer amount. Apply online with a simple application process and enjoy the benefits of this lifetime-free credit card!