Singapore Balance Transfers: How They Work and the Best Rates in 2022, Money News



We don’t wish any of our readers bad luck, but if you ever find out that you’re having trouble paying off your credit card bills and your accrued interest is stuck in a sickening upward spiral, a balance transfer could help you. to help. you.

What is a balance transfer?

A balance transfer is a short term cash flow facility, which is a fancy way of saying that it works as a kind of loan.

When you request a balance transfer, you are asking to transfer your existing debt to this new loan. You will then continue to repay your debt according to the terms of the balance transfer, rather than according to your credit card agreement.

Balance transfer saves you more time to pay off your credit card debt without having to worry about increasing interest.

Balance transfers typically charge 0% interest, but they’re not entirely free because you have to pay a processing fee, typically charged as a percentage of the amount approved for the transfer.

6 and 12 month balance transfers are the most common type offered by all banks, but some also offer three, nine and 18 month transfers.

What’s the best balance transfer rate in Singapore in 2022?

Here are the rates currently offered by banks for 6-month and 12-month balance transfers. All of them offer 0% interest per year, but charge a processing fee, so this is what we’re comparing:

6 month balance transfer processing fee

12-month balance transfer processing fee

Standard Chartered

1.5 percent



1.58% (for new bank customers)

5.5 percent


2.5 percent



2.5 percent

4.28 percent


2.5 percent



2.5 percent

4.88 percent

Currently, Standard Chartered offers the lowest fee for 6 month balance transfers at 0% pa + 1.5% processing fee.

The second best option for 6 month balance transfers is Citibank if you are not an existing customer of the bank. They charge new customers 0 percent pa + 1.58 percent fees.

For 12-month balance transfers, the most cost-effective option is UOB, which charges 0% per annum + 4.28% processing fee.

If you don’t want to use UOB, the next best options would be Standard Chartered, OCBC, or DBS, all of which offer 12-month balance transfers at 0% pa + 4.5% processing fees.

How does a balance transfer work?

Now we are not asking you to take out more loans when you are already in debt. Instead, a balance transfer allows you to transfer your existing debt to a new facility that will hopefully be cheaper for you in the long run.


How it works is that it allows you to transfer your existing credit card balances to a 0 percent interest account. If the balance transfer is successful, you won’t have to keep paying the exorbitant interest rates on your credit card.

You must pay the processing fee when the transfer is approved. But after that, you can pay off your debt with peace of mind without having to worry about snowballing interest, as the balance transfer facility charges 0 percent interest.

For example, say you have a $ 2,000 credit card bill from bank A and a $ 3,000 bill from bank B. You decide to transfer that $ 5,000 debt via a balance transfer from bank. bank C, which charges a 2.5% processing fee.

You will therefore have to pay an upfront fee of $ 125 (2.5% x $ 5,000). After that, you pay off your $ 5,000 debt over a period of 6 months without having to pay interest.

How much can you borrow with a balance transfer?

You may want to consider getting a balance transfer if you’re having trouble paying off credit card debt, whether with one or more cards.

Note, however, that you can only transfer as much money as your credit limit with the bank allows. So, if you have debts with multiple cards, you might not get approved for the full amount.

The amount you can get for a balance transfer is not unlimited. The amount of your balance transfer is subject to your existing credit limit at the bank. So if you’ve gone over your credit limit on multiple cards, you’re unlikely to be able to transfer all that debt in one balance transfer.

What if you don’t repay the full amount on time?

So if you’re going to use a balance transfer to pay off your credit card debt, do your best to do it once and for all, even if that means eating instant noodles every day for months.

If you don’t stick to the repayment plan, the bank may start charging you its going interest rate, which is usually similar to the credit card interest rates you used to pay.

In other words, you might find yourself in a worse situation than before because you’ll be paying credit card-level interest rates after you’ve already paid high processing fees.

If you are not sure if you can repay the loan in full during the life of the balance transfer, you should consider a personal loan instead, as this can give you more time to repay the money – up to several years if necessary. .

Balance transfer vs personal loan: which is better?

Balance transfers and personal loans can save you time to pay off your credit card debt and keep your interest from spiraling out of control.

Unlike balance transfers, personal loans charge interest, but usually at much lower rates than credit cards.

What is the best option for you? It depends on several factors:

  • The amount of your loan
  • How long do you need to pay it back
  • Total cost (processing fees + interest)

Loan Amount: Before you can get a balance transfer approved, the issuing bank reviews the credit limit you have with them. This is usually 2X to 4X your monthly income (2X if you earn less than $ 30,000 per year; 4X if you earn $ 30,000 to $ 120,000 per year). So if you were earning $ 3,000 per month, your credit limit would be $ 12,000.


If your credit card debt exceeds this amount, you will not be able to get a balance transfer for the full amount.

Repayment term: Balance transfers are generally short-term loans, with the longest term being 18 months. But you really have to make a commitment to meet the repayment schedule or you could end up in hot water again.

If you’re not sure you can pay off your debts in full in 18 months, opt for a personal loan instead. Personal loan terms are longer, ranging from one to seven years, making your payments more manageable. Of course, the longer your loan, the more interest you pay.

Total cost: If both the balance transfer and the personal loan are feasible, then you will need to do the math and calculate whether it would be cheaper for you to pay the processing fee for a balance transfer or the full amount of the costs. interest over the life of a personal loan.

This article first appeared in MoneySmart.


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