Help guide to Taking A Charge card Funds Transfer- If you want One

In Singapore, debtors have tallied up close to S$5.Two million in rollover balances on their own credit and bank cards. More worryingly, the amount of debtors went up by 30% since 2010.

If you find yourself indebted, you should know what your options are to get away from the situation, instead of letting it get out of hand.

Making Use Of Credit Card Funds Transfer

A viable way to start repaying your debts is as simple as utilising a credit card funds transfer (also known as credit cards balance transfer).

We explained in a recent article on how credit cards funds transfer can help in saving around the interest incurred in your outstanding balance, while you are repaying it.

If you think applying for a credit card funds transfer is the right option for you, here is a step-by-step help guide to do so.

Step 1: Determine How Much You Need And Can Borrow

If you're already swimming indebted, chances are you currently owe money to more than one lender.

The initial step is to consolidate your outstanding debt and determine whether you are able to repay it having a charge card funds transfer, whilst considering your available borrowing limit.

If your credit limit falls short of your total outstanding debt, you can look at prioritising make payment on debt incurring the highest interest.

Step 2: Figure out how Long You'll need The cash For

On surface of that, you should know just how long you'd decide to try repay your financial troubles.

Most credit card funds transfers present an interest-free rate for any tenure of three months to Twelve months, having a one-time processing fee.

For example, Standard Chartered Charge card Funds Transfer includes a processing fee of 1.99% (Effective Rate of interest (EIR): 4.12% per year (p.a.)) for a 6-month tenure and 4.5% (EIR: 4.86% p.a.) for a 12-month tenure with zero interest^ for any minimum loan amount of S$1,000.

Source: Standard Chartered Charge card Funds Transfer*

Even though a longer tenure might equal paying a greater one-time processing fee, it may be the better option to realistically spend the money for borrowed sum in the long run*.

The key thing to remember is: you have to pay off your charge card funds transfer amount within the promotional tenure, otherwise the outstanding amount will be charged at the prevailing card rate of interest of approximately 25% to 28% p.a1.

A word of caution for individuals who think that they can simply take another charge card funds transfer to settle the first one. Your credit score will continue to deteriorate while you take more loans and credit facilities.

Step 3: Comprehend the Fees Involved

When going for a charge card funds transfer, you need to find out the effective interest rate that you'll be paying, this is usually based on the one-time processing fee*.

However, remember that the effective rate of interest is only accurate provided you are making the minimum payment on time every month and repay the entire balance due inside the promotional tenure. Following the promotional tenure, if you're not able to repay the entire amount, you'll start incurring prevailing charge card rate of interest on your outstanding balance.

In addition, the amount you owe will be put through both overtime rates of interest and fees* if you don't spend the money for minimum monthly amount due for your credit card funds transfer or charge cards through the payment due date.

Step 4: Consider Your Monthly Repayment

Once you are taking up credit cards funds transfer, you need to start paying the minimum monthly payments, which can be less than 1% from the amount you owe1, plus any interest and/or processing fees. After the promotional period, you are likely to pay the full outstanding amount.

As mentioned, if you are not disciplined enough to save in the full repayment amount at the end of the promotional tenure, you would start incurring interest charges around the remaining unpaid loan amount.

Think about it: should you pay 1% every month for 11 months, you will need to fork out over 89% of your principal amount in the final month. To avoid this situation, you can look at repaying a lot more than the minimum amount each month or start putting aside savings every month to pay off this amount at the end.

Step 5: Finding A Suitable Credit Card Funds Transfer

Find a bank that suits your needs for your credit card funds transfer. To do so, you should consider and compare the above-mentioned factors including the promotional tenure, effective rates of interest, other charges and fees, and minimum monthly repayment.

The next thing you must do is locate out regardless if you are able to get the total amount you need in the bank to be able to minimise the eye rates you're currently chalking up and also to consolidate your debt in a single place.

Standard Chartered Credit Card Funds Transfer is offering a promotional rate of 0% interest, with a one-time processing fee of 1.99% (EIR: 4.12% p.a.) for a 6-month tenure or 4.5% (EIR: 4.86% p.a.) for a 12-month tenure^.

If you're thinking of applying for a credit card funds transfer, that can be done here.

Take It One Step At A Time

Being indebted could be daunting.

Take charge of your money and consolidate your debt with a charge card funds transfer. Make prompt monthly obligations and also have plans in place to repay the entire amount prior to the end of the promotional tenure.

Getting one may just help relieve short-term financial stress, whilst incurring less fees and interest charges*.

^This promotional interest rate is just valid for that “Approved Amount” and “Tenure” as defined under Credit Card Funds Transfer Programme Product Terms and Conditions on sc.com/sg/ccft. The prevailing interest rate chargeable for the Credit Card account will apply following the approved tenure around the outstanding principal amount. *Standard Chartered Bank (Singapore) Limited's Credit Card Funds Transfer Programme Product Terms and Conditions apply. For full Terms and Conditions, refer to sc.com/sg/ccftterms.