Credit cards are known to be versatile products when it comes to the utility factor. Apart from making purchases online and offline, one can also use them for other charges and transactions such as auto payment of utility bills, EMI conversation and of course, the most famous among the lot, Balance Transfers. This facility allows you to transfer outstanding balances from other credit cards at extremely low interest rates and pay on a fixed installments basis over a pre agreed term between the bank and the card member.
This is a standard feature of any bank credit card in Philippines. One can consider transferring the entire outstanding value if the current card has the available limit, helping them save interest charges being paid with the current bank at a higher rate. This is one of the most recommended methods of debt consolidation as it not only offers to save money but also ensures repayment within a stipulated time helping you to get rid off the debt. Some banks also let you transfer balances from other debt sources such as tuition fees as a part of ongoing offer or during a promo period.
Let's learn more about the way it works in the section below.
Basics about Credit Card Balance transfer
It's easy, quick and helps you save loads of money. BTs is one of the most sought after channels to pay off balances from high interest credit cards and consolidate debt. In the Philippines, offers from credit card issuers galore with pleasing rates and charges. This options helps if you’re trying hard to juggle outstanding balances from various cards, paying high rate of interest and unable to clear pay off the balances. In such cases, go ahead and transfer the balance to a card that offers this option at low rate of interest.
How Does it Work?
The card member identifies outstanding card balances with a view to consolidate and pay off credit with billed at high interest rates. The cardmember now scouts for balance transfer offers from various card providers, checks the value and chalks out a plan to initiate a transfer. He/She now gets in touch with the bank(offering BT) either by calling them or visiting the closest branch. Some of them may even offer this as an option online via internet banking. Based on the offer and approval, the representative initiates a transfer of balance from card A to card B for an amount quoted by the cardmember. Since its an intra bank transfer that happens electronically, it may take anywhere between 3-7 business days for the process to be completed.
Once the balance is successfully transferred to card B, the cardmember is billed the monthly installment along with applicable interest charges(if any) which he/she is liable to pay along with the min. payment due for other types of transactions. Since this is an EMI payment, the cardmember pays the same amount each billing period until the entire balance is paid off along with all types of charges. Upon completion of the payment, the customer receives a confirmation from the bank. Since BTs are time bound, you know how much you’re paying over a stipulated period of time.
If your existing cards do not have this option or the transfer cannot be carried out due to insufficient balance, one can also consider applying for a new card to be used only for balance consolidation by means of a transfer. There are plenty of credit cards in the Philippines that offer attractive perks for moving outstanding balances from other cards such as low interest rates, waiver of processing fee and so on. If you’re eagerly looking forward to doing this, use the credit cards section on the homepage of this website to take a sneak peek into the offers from various banks. Simply click on the type of card from the list to read more about value added services such as BTs.
Benefits & Features of Balance Transfers
Saves Interest Charges
Let's say you have a couple of credit cards which have been fully utilized up to the extent of the limit available and incurring interest at a premium rate. Your income does not let you make high value payments each month and you’re disappointed with the mounting interest charges, month on month. By transferring outstanding balance to another card that has a good offer ensures you clear the balance up to the availability and save hundreds of Pesos by way of either reducing or paying off the outstanding amount.
Helps in Unifying the Outstanding Value
Saves you from the hassles managing multiple credit cards, tracking statements and making monthly payments. If you have them all under one roof, tracking and payment becomes an easy task. Plus, you can also pay off and terminate cards that you no longer need, thus helping in improving your credit scores.
Helps in Closing Card Accounts
No matter how desperate you’re, the bank will not close the card account until the outstanding balance is “Zero”’. If you’re desperate to pay off and close cards that you don’t wish to use, BTs can help in achieving a nil balance.
Ensures Financial Discipline
If you’re someone who is unable to balance various cards or loans held, making a balance transfer helps immensely in paying off the debt. It may sound tough in the beginning since you’re signing up for something that is likely to eat into the monthly income for the next couple of months, it controls your spending habits and ensures financial discipline.
Who Can Apply/Avail this Feature?
In addition to the bank specific criteria, the following are some of the most generally observed conditions.
- The cardholder must be in good credit standing with the bank. Repeated late payers and defaulters may not be eligible for this offer.
- The card in question should have sufficient outstanding balance to cover the transfer amount plus applicable processing charges(if any).
- The Balance Transfer offer should be an active feature on the customer’s card. Most of the issuers(banks) have this as a default feature on most of the cards in their portfolio unless specified. Secured credit cards may not be qualify for this offer.
- Exclusive interest rates are only valid during promo periods.
Top Banks Offering Balance Transfer for Credit Cards in Philippines
Security Bank: Offers balance transfer services online where the customer can fill out a form by providing Security bank cards details along with information pertaining to the card where the member wants to transfer balance from. The starting rate is just 1.91% with a term starting at 3 months, up to 24 months. A pre termination fee of P500 is applicable if the cardmember decides to pay off the balance before the term end date.
Metrobank: This bank offers balance transfers at a starting rate of just 0.68% with a min. transfer requisition of P6,000. The cardmember gets to choose from a term of 6-24 months. The transfer can be initiated over the phone by calling the dedicated customer service wing. A pre termination fee of P500 or 5% of the principal amount outstanding is applicable if the customer decides to pay off the balance before the end of term.
BPI Cards: BPI offers one of the lowest rates for balance transfers where the cardmember can take advantage of an interest rate starting at 0.59% per month. The term options offered is one of the best with 3-36 months provided to repay the amount in installments. One can transfer up to the extent of available credit limit and can apply in over 800+ branches across the nation.
Maybank: This bank allows to transfer balances from upto a maximum of 3 credit cards(non Maybank) and offers a term of 3,6,12,18 and 24 months under the EzyTransfer scheme. The interest rate starts at just 0.88% on a monthly basis. The minimum amount required to initiate a transfer is P5,000.
Some of the banks may charge an upfront transaction/processing fee of 1-2% of the balance being transferred. Do inquire about this component at the time of transfer. The applicable fee will be billed to the card account, payable along with other charges.
Tips Before Initiating a Transfer
Balance transfers can be a boon in disguise if you’re suffering from the burden of handling multiple credit card debts. Before settling for this option, compare offers from various card issuers and choose the best that not only offers you low interest rates, but feasible terms as well. You can lookup for features and benefits offered by various bank cards under the “Credit Card” section of this website.
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