Credit card debt has been on the rise. According to statistics released by the Monetary Authority of Singapore, for example, credit card debt has risen to S$10.8bn by the end of 2016, a record high. If you are one of these people with piling unpaid credit card balance, you may want to consider getting a balance transfer loan from a bank. Since credit cards charge 25% interest on average, balance transfers could really help you save a lot of money by providing you with an interest rate free period so you can manage to pay down your card debt as quickly as possible. Below, we discuss the best balance transfer offerings we've found in Singapore to help you find the best option to manage your debt.
Table of Contents
- Our Top Picks for the Best Balance Transfer Loan
- Visual Comparison of Balance Transfer Loans
Our Top Picks for the Best Balance Transfers in Singapore
Below is our handpicked list of the best balance transfer offers currently available in Singapore. Balance transfers usually come with a service fee and a "interest free period" during which you can pay down your unpaid credit card balance without incurring more interest expense. Therefore, you should try to find an option with the lowest fee for the appropriate duration that you can use to pay down your debt. We've organized the best balance transfers by fee and length of interest free periods.
Best 6 Months Interest Free Period Balance Transfers
Standard Chartered Funds Transfer
If you are looking for a balance between a decent length of interest free period and a low processing fee, then Standard Chartered's Funds Transfer product might be a good fit for you. It only charges a processing fee of 1.99%, compared to 2-2.5% being charged by its competitors. With this, you get 6 months of interest-free period that you can use to pay down your credit card balance. It can be used to pay down your personal loan balance as well. Standard Chartered's credit card balance transfer also comes with a 1% monthly repayment requirement, which is the lowest in the market. However, you should remember that you will incur 28% of annual interest after your 6th month; therefore, you should really try to pay much more than the monthly repayment requirement so that you can get rid of your debt while you are not incurring a high level of interest.
Citibank Balance Transfer
If you have not had a banking relationship with Citibank in the past 12 months, then Citibank's Balance Transfer product is also a superb option for 6-months interest free balance transfer. As long as you are a new customer to Citi, you can enjoy 6 months of zero interest on your balance transfer for paying only 1.58% of service fee, which is even lower than Standard Chartered's. However, this rate can actually increase to 2.5% if you've had a banking relationship with Citi in the past 12 months. Citi's credit card balance transfer also provides the market leading 1% monthly repayment requirement. As always, please make sure to redeem as much of your balance as possible since you will incur 26% of annual interest after your 6th month.
Best 12-18 Months Interest Free Period Balance Transfers
UOB Balance Transfer
In our view, UOB's Balance Transfer product is the best one in the market, especially if you are looking for 12-month interest free period option. For people who sign up for this product online, UOB is offering a special 3.88% processing fee, compared to +4.5% being charged by other banks. UOB is also the only bank in Singapore that offers an 18-months interest free period for a processing fee of 4.88%. You can get a credit card, or just a CashPlus balance transfer loan, which only differ in terms of their monthly minimum payment requirement. This shouldn't be too much of a factor for people who are looking for ways to pay down their debt in full as soon as possible. When your interest free period is over, you will begin to incur 26% of annual interest on your remaining balance, so you should be paying down this balance as much as possible every month, instead of paying just the minimum requirement.
OCBC Balance Transfer
In our view, OCBC's Balance Transfer product is also the best 12-month interest free offer in the market, but only for new OCBC customers. For people who have not banked with OCBC before, OCBC is offering a special 3.88% processing fee, much lower than +4.5% being charged by other banks. If you are not new to OCBC, however, they charge a processing fee of 4.28%, which is not the best rate you can get. Its minimum monthly repayment is 3% of total outstanding (or S$50, whichever is higher), though this shouldn't be too much of a factor since you should try to pay down your debt in full as soon as possible. If you don't, you will start to incur 26% of annual interest on your remaining balance, which can cost you a lot of money depending on how much balance you have left.
Best 3 Months Interest Free Period Balance Transfer: UOB Balance Transfer
If you have only a small amount of unpaid credit card balance that you can pay down within 3 months, then UOB's Balance Transfer is likely the best option for you. For an interest free period of 3 months, UOB's balance transfer only charges a processing fee of 1.49%, the lowest we've seen in the market. In comparison, other banks generally charge 1.58% to to 1.8% for the same length of interest free period. As we mentioned above, it is critical that you pay down all if not most of your balance within the designated interest free period. This is because your remaining balance will incur interest of 26% after your 3rd month, which can balloon into a considerable amount before you know it. Therefore, this product is ideal for small balance transfers that you can manage to repay quickly.
Summary Table of Best Balance Transfer Offers in Singapore
In case you want a quick look at our picks, here are ValuePenguin's best balance transfers for 2017.
|Processing Fee by Interest Rate Free Period||3-months||6-months||12-months||18-months||Minimum Monthly Repayment|
|UOB CashPlus Balance Transfer||1.49%||2.5%||3.88%||2.5%|
|UOB Credit Card Balance Transfer||1.49%||2.5%||3.88%||3.0%|
|OCBC Balance Transfer (new customers)||1.8%||2.5%||3.88%||3.0% (or S$50, whichever is higher)|
|OCBC Balance Transfer (existing customers)||1.8%||2.5%||4.5%||3.0% (or S$50, whichever is higher)|
|Standard Chartered Funds Transfer||1.99%||4.5%||1%|
|Citibank Credit Card Balance Transfer||1.58%||1.58%||5.5%||1%|
|Citibank Ready Credit Balance Transfer||1.58%||1.58%||5.5%||3%|
|DBS/POSB Balance Transfer Cashline||2.5%||4.5%||2.5%|
|DBS/POSB Balance Transfer Credit Card||2.5%||4.5%||3%|
|Maybank Fund Transfer||1.88% if >S$10,000, 2.5% if <S$10,000||2.5% + 4.99% of interest||3%|
|HSBC Credit Cards Balance Transfer||S$88 waived if >S$10,000 + 2.5% of interest||S$88 waived if >S$10,000 + 4.88% of interest||3%|
|HSBC Personal Line of Credit Balance Transfer||S$88 waived if >S$10,000 + 3.2% of interest||S$88 waived if >S$10,000 + 4.88% of interest||3%|
Visual Comparison of Effective Interest Rates of Balance Transfer Loans
For interested readers, below is a graphic illustration of effective interest rates of each balance transfer loan available in Singapore, organized by tenure of loans. These are calculated by assuming you only make the monthly minimum repayment requirement each month of your loan, and repaying the whole remaining balance in the last month of your interest free period.