Balance transfer facility in HDFC Bank Credit Card

Imagine a situation where you have a large balance outstanding on your credit card, but are unable to pay the entire amount within the due date. In this case, the bank will levy a huge interest charge on the unpaid amount. The interest rate charged by the bank is exorbitant, to say the least. It is therefore desirable that one does not get into this situation. But if it is impossible to pay, then there is another way out. It is called ‘Balance Transfer’, where you can transfer the outstanding balance on your credit card to another bank’s new or existing credit card.

How does the customer and the banks benefit from Balance Transfer?

The customer saves on the interest cost he has to pay. Say for example, he is required to pay Rs.40,000 on his credit card, but can manage to pay only Rs.10,000 within the due date. He will be charged a very high interest (in some cases, even 3.6% per month) on the remaining Rs. 30,000. When he transfers the balance, he can either get an interest free credit period on this amount or will have to pay a preferential interest rate, which is much lower (less than half in most cases) than normal interest rates on the card. The interest free period or the concessional interest period varies from bank to bank, but it is generally not more than 6 months. The bank to which he transfers the balance benefits as it receives a new customer. The bank from which he transferred loses the customer, but the outstanding amount is no longer unpaid. The entire amount is paid by the bank to which the balance is transferred. It is therefore a win-win arrangement.

HDFC Bank’s Balance Transfer Facility

HDFC Bank offers Balance Transfer facility to customers on its credit cards. This means an individual can transfer an outstanding balance from any card in any bank to an HDFC credit card account. The individual may or may not have this card. If it is a new card to which he is applying, he will have to carry out card opening formalities before transferring the balance. On the other hand, if he wishes to transfer the amount to a HDFC credit card which he already possesses, the process is simpler.

The transfer amount should be a minimum of Rs.2,500 and maximum of Rs. 1 lakh. The amount however cannot be more than the outstanding balance on the other card account. The eligibility criteria vary from customer to customer. Banks check the number of times you transfer the balance on your card. Too many balance transfers will lead to rejection, as it is seen as a way to enjoy interest free credit.

HDFC Bank only allows balance transfer from non-HDFC Bank credit card accounts. It is also not applicable from accounts with an overdue status or where the credit limit has been exceeded. The bank will only pay for the outstanding balance and will not be liable for any new charges, interest or overdue payments. HDFC Bank will pay a cheque or DD favoring the other card issuer while taking over the balance amount.

The bank charges 2% of the Balance Transfer amount or Rs.250, whichever is higher as the Balance Transfer processing charges. Customers can enjoy the preferential interest rate on the amount transferred for 3 months only. Beyond this, normal interest rates would apply.

There is a facility to request for transfer from different card accounts. However, this request should be made across cards at the same time and not at different points in time.