This article is written in collaboration with Standard Chartered Bank (Singapore) Limited (“SCBSL”). All information provided is for informational purposes only and is not intended to be as advice or an offer for any product or service. SCBSL is not liable for any informational errors, incompleteness, delays, or for any actions taken in reliance on information contained herein. All views expressed in the article are the independent opinions of DollarsAndSense.sg
In Singapore, debtors have racked up close to S$5.2 million in rollover balances on their credit and charge cards. More worryingly, the number of debtors has gone up by 30% since 2010.
If you ever find yourself in debt, you need to know what your options are to get out of the situation, instead of letting it spiral out of control.
Read Also: How Quickly Credit Card Debt Can Snowball And Leave You In Financial Ruin
Making Use Of Credit Card Funds Transfer
A viable way to start repaying your debts is by utilising a credit card funds transfer (also known as a credit card balance transfer).
We explained in a recent article on how a credit card funds transfer can aid in saving on the interest incurred on your outstanding balance, while you are paying it off.
If you think applying for a credit card funds transfer is the right option for you, here’s a step-by-step guide to do so.
Step 1: Determine How Much You Need And Can Borrow
If you are already swimming in debt, chances are you currently owe money to more than one financial institution.
The first step is to consolidate your outstanding debt and determine whether you can repay it with a credit card funds transfer, whilst considering your available credit limit.
If your credit limit falls short of your total outstanding debt, you can consider prioritising paying the debt incurring the highest interest.
Step 2: Determine How Long You Need The Money For
On top of that, you need to know how long you would take to repay your debt.
Most credit card funds transfers offer an interest-free rate for a tenure of 3 months to 12 months, with a one-time processing fee.
For example, Standard Chartered Credit Card Funds Transfer has a processing fee of 1.99% (Effective Interest Rate (EIR): 4.12% per annum (p.a.)) for a 6-month tenure and 4.5% (EIR: 4.86% p.a.) for a 12-month tenure with zero interest^ for a minimum loan amount of S$1,000.
Source: Standard Chartered Credit Card Funds Transfer*
Effective Interest Rate (EIR) is calculated based on the processing fee charged for the loan tenure.
Even though a longer tenure might equate to paying a higher one-time processing fee, it might be the better option to realistically pay the borrowed sum in the long run*.
The key thing to remember is: you must pay off your credit card funds transfer amount within the promotional tenure, otherwise the outstanding amount will be charged at the prevailing card interest rate of approximately 25% to 28% p.a1.
A word of caution for those who think that they can simply take another credit card funds transfer to settle the first one. Your credit score will continue to deteriorate as you take more loans and credit facilities.
Step 3: Understand The Fees Involved
When taking a credit card funds transfer, you need to find out the effective interest rate that you will be paying, this is usually based on the one-time processing fee*.
However, remember that the effective interest rate is only accurate provided you make the minimum payment on time each month and repay the full amount owed within the promotional tenure. After the promotional tenure, if you are not able to repay the full amount, you will start incurring prevailing credit card interest rate on your outstanding balance.
In addition, the amount you owe will be subjected to both late payment interest rates and fees* if you do not pay the minimum monthly amount due for your credit card funds transfer or credit cards by the payment due date.
Step 4: Consider Your Monthly Repayment
Once you take up a credit card funds transfer, you have to start paying the minimum monthly payments, which may be as little as 1% of the amount you owe1, plus any interest and/or processing fees. At the end of the promotional period, you are expected to pay the full outstanding amount.
As mentioned, if you are not disciplined enough to save up the full repayment amount at the end of the promotional tenure, you would start incurring interest charges on the rest of the unpaid loan amount.
Think about it: if you pay 1% each 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 consider repaying more than the minimum amount each month or start setting aside savings each month to pay off this amount at the end.
Step 5: Finding A Suitable Credit Card Funds Transfer
Find a bank that caters to your needs for your credit card funds transfer. To do so, you should consider and compare the above-mentioned factors which includes the promotional tenure, effective interest rates, other fees and charges, and minimum monthly repayment.
The next thing you need to do is find out whether you are able to receive the total amount you require from the bank in order to minimise the interest rates you are currently chalking up and 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 are thinking of applying for a credit card funds transfer, you can do so here.
Take It One Step At A Time
Being in debt can be daunting.
Take charge of your finances and consolidate your debt with a credit card funds transfer. Make prompt monthly payments and have plans in place to repay the full amount before the end of the promotional tenure.
Getting one may just help relieve short-term financial stress, whilst incurring less fees and interest charges*.
Read Also: Pros And Cons Of Taking A Credit Card Balance Transfer
1The information is obtained from public sources and do not serve as a representation of any financial institution.
^This promotional interest rate is only valid for the “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 after the approved tenure on 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.
All Standard Chartered Bank Credit Card Funds Transfer (CCFT) applications are subject to SCBSL’s loan approval process at its sole discretion. For more information on the Standard Chartered Credit Card Funds Transfer (CCFT), visit sc.com/sg/ccft
Advertiser Message
Switch, spend & score up to S$750 with DBS
Power up your payday with up to S$750! Credit your salary to DBS/POSB to get S$300. Apply & spend with DBS Live Fresh Card to earn up to S$450 more. Register by 30 June 2025. T&Cs apply.
