The process of balance transfer is one that is increasingly encouraged by most financial institutions today. Balance transfer implies the transfer of the balance of one credit card to another account of a different company and using the amount to pay off your existing credit card outstanding. This process is far more efficient because a credit card typically charges a very high rate of interest. The same is not the case with a balance transfer. Financial institutions today offer balance transfer facilities at promotional low interest rate structures in order to attract new customers. Due to these low interest rates offered, you can save significantly in your credit card payments. In addition to this, you can also avail added benefits and rewards offered by different credit card issuing companies.
OCBC is the common name for Oversea - Chinese Banking Corporation. This continuous to be one of the largest banks across the world. With its headquarters in Singapore, it is among the top banks here as well. It has offices and branches in 15 different countries. It has a total of 411 offices and branches with retail subsidiaries in Malaysia, Hong Kong, China and Indonesia. OCBC’s network is so vast that their total assets are worth more than Singapore itself. Some of the prominent branches of the bank are located in USA, UK, China, Australia and Japan to name a few. Since the inception of the bank in 1919, it has been expanding exponentially. It gets its present name from the merger of three different banks in 1932- Ho Hong Bank, Oversea- Chinese Bank and Chinese Commercial Bank. In 1972 it acquired Four Seas Communications Bank, one of the most age old banks in the entire Singapore that was established in 1906.
If you want to consolidate your unsecured debts into one card or want access to more cash, the balance transfer facility available on your OCBC credit card is a logical way to go forward. You can convert the available credit limit on your card or EasiCredit Account into cash and fund your various expenses and investments.
If you’re 21 or older, a Singaporean national/PR with a minimum annual income of S$20,000 or a foreigner with an annual income of S$45,000 at least, you can apply for this facility.
You can choose to transfer your outstanding credit balances from cards issued by other lenders or other credit lines to your OCBC credit card. You can conveniently apply online through the bank’s website. You’ll need to have a card account and be a holder of a valid Visa or Mastercard issued by OCBC in order to be an applicant.
You can pay a minimum of 3% of your outstanding balance at the end of each month or S$50, whichever is higher, to keep your debt revolving. You won’t be allowed to withdraw your application or make changes to the total amount you have decided to transfer, once your application has been successfully submitted.
While your balance transfer facility is interest-free, an effective interest rate will still apply due to the applicable processing fee that will vary depending on the tenure of the loan. You have to option of repayment in 3, 6 or 12 months.
The following table will give you an idea about the processing fees and effective interest rates on different tenures.
|3-Month Tenure||6-Month Tenure||1-Year Tenure|
|Applied Interest Rate (APR)||0% p.a.||0% p.a.||0% p.a.|
|Effective Interest Rate (EIR)||7.22% p.a.||5.19% p.a.||4.99% p.a.|
Let us now consider an example. If want to transfer a balance of S$5,000 to your card issued by OCBC, the interests you’ll have to pay for the different tenures are:
|Outstanding balance/Interest payable||3 months||6 months||1 year|
|Total repayment (principal + interest)||S$5,090||S$5,125||S$5,225|
Now, if you continue paying with your credit card outstanding balance of S$5,000 at an interest rate of 25% p.a. for a year, your repayment will be S$6,250 (principal amount of S$5,000 and interest amount of S$1,250).
|For outstanding balance of S$5,000 with 1-year repayment||Interest payable||Total repayment|
|Your savings with balance transfer||S$1,025|
Note: The above examples are for illustration purposes only.
Till your balance transfer credit card application is accepted and successfully processed by OCBC, you’ll have to meet your dues on cards or lines from which you want to transfer the balance. The bank will not be liable for any expenses, late fee charges and other fees that may be charged due to your inability to pay off the dues while waiting for your balance transfer approval.
OCBC bank has become the first bank in South East Asia to start using blockchain technology. This latest technology has changed the way transactions are recorded and saved. It has become a game changer in the financial services sector as it allows to create secure web based systems that can record financial transactions and undertake settlements.
OCBC has said that it is the first bank in South East Asia to implement this technology. They have been able to carry out successful pilots such as cross border fund transfers between OCBC Singapore and Private Bank of Singapore and OCBC Malaysia as well.
16th November 2016