By MoneyBees
Compare a balance transfer's one-time fee with the interest of revolving card debt, see the fee's EIR worked the way banks publish it, and what you pay on any balance left after the 0% period.
A bank lends you money at 0% interest for a few months, for a one-time fee, so you can pay off debt that charges more, such as a credit card at 27.8% a year. You repay the bank over the 0% period.
DBS and OCBC publish 1.8% for 3 months, 2.5% for 6 months and 4.5% for 12 months. UOB publishes 1.50% for 6 months and 3.88% for 12 months. The fee you are offered depends on your credit profile.
It turns the one-time fee into a yearly rate. DBS, OCBC and UOB work it out assuming you pay the minimum each month and the rest in the last month. That gives 7.38% for a 1.8% fee over 3 months and 5.20% for 4.5% over 12 months.
The rest is charged interest at the rate in your terms. At DBS it is the card rate of 27.8% a year; OCBC charges its cash advance rate of 28.92%, UOB 28.5% and Citi 27.9%.
Yes. The amount is taken from your available credit limit and restored as you repay. DBS lets you transfer up to 93% of your available limit, OCBC 90%, UOB 95%, and Citi 90% of the combined limit. The minimum is S$500.
Yes. At DBS, OCBC and UOB the minimum is 3% of the balance or S$50, whichever is higher. Miss it and you pay a late fee of S$100 to S$120; at Citi the promotional rate also ends.
Almost always, if you clear the debt by the end of the 0% period. S$10,000 at 27.8% paid off at S$1,000 a month costs S$1,509.59 of interest, against a S$450 fee for 12 months at 4.5%. Paying only the minimum on the card takes years and costs far more.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).