Benefits of Using Credit Card Balance Transfer

SINGAPORE, Dec 21, 2023 – (ACN Newswire via – Dealing with mounting debt and snowballing interest charges from several credit cards can be an unnerving and frustrating experience. However, not all is lost – applying for a balance transfer could make the debt repayment process more manageable.

What exactly is a balance transfer? As the term suggests, it entails transferring the outstanding balance on your existing credit card(s) to another credit card to take advantage of lower or zero interest rates for a specified period. Keep reading to learn how balance transfers work in Singapore.

How Does Credit Card Balance Transfer Work?

Balance transfers are short-term, unsecured loans that typically charge 0% or low-interest rates for a specified period. When you transfer your outstanding balance on your credit card to another credit card offering a balance transfer facility, you can have the flexibility of repaying your debt at 0% or low interest rates during the promotional period, typically 6 to 12 months. This also means you can enjoy interest savings on your monthly repayments – provided you manage to clear your debt payments within the promotional period.

While the exact process for balance transfers may vary across providers, here are the general steps:

  • Apply for a new credit card that offers a balance transfer facility.
  • Once your application is approved, you may initiate the balance transfer via the bank’s app or online platform.
  • Upon approval of your balance transfer, the issuer of your new credit card will pay off the outstanding balance(s) on your existing credit card(s). The outstanding balance paid will then be reflected in your new account, together with the balance transfer fee.
  • You will now need to start making monthly repayments to the new account. If you wish to take advantage of 0% or low interest rates, you must pay off your outstanding balance within the promotional period.

Benefits of using Credit Card Balance Transfer

Here are some reasons why you may consider applying for a credit card balance transfer:

  • Save on interest payments: High interest rates on your existing credit card debt may be one of the reasons why it’s getting increasingly difficult to fulfil the monthly repayments. With a balance transfer, you can take advantage of 0% or lower interest rates during the promotional period, allowing you to direct more of your monthly repayments towards reducing your credit card balance instead of interest payments.
  • Improve your credit score: A balance transfer could improve your credit score by lowering your credit utilisation ratio, which is the percentage of your total available credit that is already used. When you transfer your outstanding balances to a new credit card, your total available credit increases by the available credit amount on your new card. As you continue to make consistent monthly repayments, your credit utilisation ratio will decrease over time, improving your credit score.
  • Consolidate credit card debt: A balance transfer could be beneficial if you find it challenging to keep up with multiple credit card repayments monthly. With a balance transfer, you can consolidate your debt from multiple credit cards to a single account, making it easier to track your monthly financial commitments.


Balance transfers can be instrumental in helping to clear your debt quicker if you have confidence in making consistent monthly repayments throughout the promotional period. Before deciding on a credit card balance transfer , make sure to consider your reasons for wanting to do so, weigh your options and understand the terms and conditions.


The content reflects the view of the article’s author and does not necessarily reflect the views of Citi or its employees. Please read the products and offers on the Citi Singapore website for accuracy or completeness of the information presented in the article.

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Sonakshi Murze

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