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A balance transfer can help the cardholder to pay off the balance amount on an existing card by transferring it to another card. Balance transfer credit cards are becoming increasingly popular in the UAE. A credit card balance transfer can help save a lot on higher interest rates to pay off the debt with ease.
Many credit card providers offer a low or 0% introductory APR (Annual Percentage Rate). Noteworthy here is that APR rate can come up to 48% after the introductory rate of APR is no longer valid. Suppose an applicant owes a high amount to the credit card issuer with a 21% APR. In that case, what would be the wise thing to do? It is simple, they can transfer the debt to a credit card with a low or 0 % APR and save a lot on interest. It is a quite viable way of paying off debt. Most balance transfer credit cards in UAE come with a plethora of benefits such as interest-free period, loyalty points, low-interest rates etc.
The credit cardholders who wish to pay off the balance on existing cards can opt for a fresh credit card and avail the benefit of balance transfer in the duration of 5-7 working days. Debt management has become easier with balance transfer credit cards in the UAE. It goes without saying that best credit cards always come in handy whether the applicant wants to build their savings/ good credit or is planning to avail amazing discounts and offers. If for some reason, if the card holder has gotten into financial crunch and has to pay interest charges, they can opt for best balance transfer cards.
A zero percent balance transfer credit card provides great options for those who do not want to pay any interest on purchases for a pre-decided duration of time. The cardholder can transfer their balance from an existing credit card, (on which they might be paying high-interest rates) to the credit card with better APR rates without paying any financial charge for six months or more.
Here are the features and benefits of the balance transfer credit card:
a. Low Rate of Interest- If the cardholder has a credit card with a high-interest rate, opting for a credit card with a low rate of interest is a wise move. Transferring high-interest debt from existing credit card to a card with a significantly lower interest rate will enable them to pay off the debt. Since they will have to pay a much lower rate of interest (perhaps no finance charges as well), their monthly credit card expenses will contribute to paying the outstanding balance of their credit card, and not interest.
b. Pay Low Charges- It is easy to transfer the balance to a new credit card with the one that offers better benefits. If the cardholder’s existing card has a bad history in terms of high fees or low grace period, they can transfer their balance to a better credit card for the good. The new credit card may even offer promotional rewards on making new purchases.
c. Low APR- Transferring balance to the card with a low balance transfer APR can help the cardholder save a lot on their existing debt. The reason is that they can get a low or 0% introductory APR to pay off the balance within a stipulated time frame.
The eligibility criteria for balance transfer are similar to any other credit card. Mainly, it takes the current credit health and repayment capacity of the applicant into consideration. Listed below are the details about balance transfer credit card eligibility.
The credit card usage patterns and habits speak volume about the credit card member. Based on that, the credit card issuer determines whether the applicant can get a new credit card or not. The credit card provider takes into account various factors such as credit history, on-time payments, or loan default (if any). The issuer considers these factors to determine the repaying capacity of the cardholder.
The process of getting a good credit rating is not as complicated as it may seem. Here is what makes a good credit score.
| Credit Rating | Score |
|---|---|
|
Excellent |
720-850 |
|
Good |
680-719 |
|
Fair |
620-679 |
|
Poor |
300-619 |
Please Note: This table is merely a visual representation and does not vouch for the accuracy of the data.
The better the applicant scores in terms of ratings and repayment, the more credit limit a credit card provider will be willing to offer. Higher credit ratings imply that the applicant is eligible for a higher credit limit and lower interest rate.
The amount the applicant owes on their existing card account is another important factor that issuers consider. In case the applicant owes a large amount of money, it will be essential for the applicant to maintain a good credit score to become eligible to avail the balance transfer credit card.
The type of borrowed debt is yet another factor to determine the ability to use the transfer of credit facility. If the applicant has a student loan with low interest and low payment, it makes sense to opt for the balance transfer credit card than maxing out on the existing card limits. Carrying different types of debt is a reflection of the spending habits of the applicant.
The debt payoff process using balance transfer credit cards only works if the applicant refrains from taking any additional debt on their new card. In case of any additional purchase, if the applicant does not repay the outstanding bill by the due date, they will be charged a high interest rate. As experts say, it is easy to change the card, not habits, so be extra careful.
Also, the applicant should make it a point to pay the minimum 5 percent of their outstanding credit balance every month. Failing to do so could lead to lapse of the balance transfer terms and they may have to pay the standard interest rate on the due balance (if any).
This ratio is a comparison between the total amount the applicant needs to pay and the total amount at their disposal. It gives an indication to the issuer about the applicant’s capability to pay off the debt.
Debt-to-income ratio= Debt / Income
Let’s say, if the applicant has to pay off a monthly payment of AED 1200 and their monthly income is AED 4000, their debt-to-income ratio would look like this:
1200 / 4000 = 0.3
The answer 0.3 means that 30 %- or one-third of your income goes toward debt payment.
If the applicant’s interest payments are higher than their income regardless of having a low debt balance, it is still a matter of concern. As a matter of fact, issuers may consider this as it affects the applicant’s ability to repay their debt with the new balance transfer credit card.
It is quite easy to apply for a credit card balance transfer. Here are the steps the applicant needs to follow:
Listed below are top UAE banks that offer balance transfer credit card:
Note- This list is in no particular order.
Here are the benefits of Citi Simplicity Credit Card:
Here are the benefits of the Citi Rewards Credit Card:
Here are the benefits of Citi Rewards Credit Card:
Here are the benefits off Citi Premier Credit Card:
Here are the benefits Emirates Citibank Ultima Credit Card:
Here are the benefits offered by Emirates Citibank World Credit Card:
Here are the benefits offered by Emirates Ultimate Credit Card:
The CBD credit cards come with plenty of benefits that help the cardholder live a life full of privileges. Using these cards, they can enjoy benefits like travel insurance, purchase protection, international concierge services and more. There are reward points and cash back for every purchase which can be redeemed for dining, shopping, and travel booking among others.
Listed below are some of the CBD cards that offer balance transfer facility:
Here are the benefits of Commercial Bank of Dubai Visa Platinum Card.
Here are the benefits of Commercial Bank of Dubai Visa Signature Credit Card:
Here are the benefits of Commercial Bank of Dubai World MasterCard:
Here are the benefits of Commercial Bank of Dubai Titanium Mastercard:
Here are the benefits of Commercial Bank of Dubai Visa Infinite Credit Card:
Here are the benefits of Commercial Bank of Dubai Super Saver:
Here are the tips that will help to find the best balance transfer credit card:
Policybazaar.ae offers the best financial products and makes personal finance decisions easy for applicants. When it comes to zeroing in on the best balance transfer credit cards, the applicants can compare various cards on the basis of benefits, fees, and features of various cards offered by various providers. Bridging the gap between the applicants and the providers has made the process of selection easy and hassle-free. Moreover, the company leaves no stone unturned to ensure complete transparency in the application process.