Balance Transfer- A valuable tool for saving

Credit card balance transfer

Balance Transfer is a facility that allows a Credit Card holder to transfer the outstanding balance on his existing Credit Card to another Credit Card at 0% interest or a low rate of interest. The new bank usually charges either a flat upfront fee or a low monthly rate of interest for this transfer.
Simply put, Balance Transfer is an interest vacation on a credit card and is a valuable option for individuals who do not pay the full amount due on the credit card.

During the vacation or “0 interest” period a Credit Cardholder can pay back the outstanding without paying the interest on the credit card. During period a Bank may offer 0 % (or 1-1.5%) interest for a period of 3-6 months. Cardholders should utilize this period to pay back as much as possible. Once the 0% interest period ends, Cardholders need to start paying interest again which is usually- 2.89 % per month.
Banks usually extend this Balance Transfer offer to existing Card Holders to shift their outstanding balance from other Banks’ credit cards to their Credit Card. For instance if a customer holds Bank A’s Credit Card where his outstanding his 20,000 he can shift it to Bank B’s Credit Card at 0% interest for 3 months. During this period he will have to pay a minimum of 5% of AED 20,000 interest free. By choice he can pay more to avoid interest. So if the customer pays 2,000 every month his outstanding balance at the end of the 3 months would be 14,000. At the end of 3 months he will need to pay interest on the new outstanding balance. Essentially he would have saved 2.89%x 6,000=170 AED.
You can check how much time is required to pay off your dues on credit Card using the “Credit Card Pay off Calculator”.

 Understanding procedure & fee for Balance Transfer

1. How can an individual apply for a balance transfer?
Firstly, an individual needs to apply for a Credit Card with the Bank where he wishes to transfer the balance from his existing Card. Balance Transfer request can be given at the time of application of a new credit card or just after he receives the Credit Card.

2. What is the maximum amount that can be transferred?
The amount depends on the Credit Card limit, the free credit on a customer’s credit card and the Bank’s policy. Banks can allow balance transfer to the extent of 90% of the credit card.  For instance, if a customer has an unutilized limit of AED 50,000 he can transfer a balance of up to AED 40, 000 from another credit card.

3. Do Cardholders need to pay anything during balance transfer period?
Credit Cardholders still need to pay the minimum 5% outstanding every month. It makes sense to pay off as much amount as possible during this period to benefit from 0% interest allowance.

4. How long does the balance transfer last?
Balance Transfer promotion period for 0% interest may vary according to Bank’s policy. Visit the Balance Transfer section to find a suitable Credit Card.

5. Is there a fee for Balance transfer?
Banks can impose a Balance Transfer fee, which is 1-2% of the amount transferred. Some banks reduce the fee to 0% during promotions.

Some current promotions running by Banks are mentioned below:


Bank Name

% Of credit limit that can be

used for balance transfer

Interest free period

Rate of interest after

the promotion period

Processing Fee
Union National Bank 95%
12 months 0.61%

2% of amount


6 months 2.99%

AED 250

per transaction

ADIB 90%
3 months 2.99%

2% of 

amount transferred

HSBC 80%
6 months 2.25

AED 100

per transaction

For more information on current offers for 0% balance transfer and other financial products, visit the Special Offer section or drop in an email to with your existing Card/ Loan details.