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Do you have high credit card outstanding balance? Do you ever try to escape for looking at the statement at every billing day?

The accumulated outstanding of credit card is terrible if you are not able to manage it very well. Credit card could change your habit on how you spend on your purchases, and the volumes of your usual purchases.

Normal interest rate of credit card is 17.5% per annum, year after year, it rolls and rolls until you can’t afford to pay it. There’s a few way actually can lower down the interest rate and settle it with more effective way.

Balance Transfer (BT)

Balance transfer programme is a very common way to settle your debt, and I bet you received a lots of calls from bank to enrol into their BT programme. I doubt that some people might not know what is Balance Transfer Programme, so just let me explain a little bit about this programme.

BT programme basically is to transfer your outstanding balance of credit card issued by Bank A to the credit card you applied from Bank B. With BT programme, you are only allowed to transfer the outstanding amount of Bank A which is not exceed the credit limit of the credit card issued by Bank B.

If a BT programme enrolment is charge at 9.88% per annum, monthly interest rate is 9.88%/12 = 0.82%. Normal interest rate is charged at 17.5% per annum and 1.46% per month, which BT programme save you 56% of interest payment.

Example,

Bank A

• Outstanding => RM 4,000
• Minimum Payment(5%) => RM 200
• Outstanding after Minimum => RM 3, 800 (Outstanding – Minimum)
• Monthly interest => RM 3,800 x 1.46% = RM 55.48
• Next Outstading => RM 3,800 + RM 57 = RM 3,855.48

Bank B (with BT Programme) – 12 months installment

• Total Transferred Amount => RM 4, 000
• Flat Rate 9.88% => RM 4,000 x 9.88% = RM 395.20
• Total Outstanding => RM 4,395.20
• Monthly instalment Amount => RM 4395.20 / 12 months = RM 366.27

From the example above with 12 months BT programme, this charge you a lower flat interest rate and sum up the total by divide into 12 months for installment (most bank offers 6,12,18,24,36 months instalment, rate is different according to the installment period).

BT programme is good if you are unable to settle your total outstanding in short period, but please be make sure you clear the instalment amount every month, because it did incur an interest charge or late charge if you didn’t settle the instalment amount.

BT programme will consume your credit limit with the transferred outstanding amount.

I recommend you can go for Maybank Balance Transfer programme offers 0% for 12 months tenure, the details and rate for other tenure can refer to http://www.maybank2u.com.my/WebBank/BTrateTable300511.pdf.

Call for Cash/ Dial for Cash / Easy Cash Programme – Fash Cash

This is very similar to the installment plan when you purchase in the merchant. The only different is, you get ITEM from your purchase, this programme give you CASH (similar to personal loan).

The cash will credited into your banking account(Saving/Current) and you can withdraw the cash to make one-off payment clear your credit card outstanding. This programme is recommended if your outstanding is not too much (unless your card offers a higher credit limit), usually the rate of fast cash programme is lower than personal loan(but you can get more cash and no limitation of credit card limit).

Here’s a few suggestion for Fast Cash Programme

• Maybank EzyCash
• One Time Interest 3.88% for 6 months tenure
• up to 90% of your credit limit
• 0% interest rate for 6 months installment. Ex: pay one time charge (3.88% of total loaned cash), and pay minimum every month until 6th month, pay one lum sum amount for the balance. There’s no any interest will charge within 6 months installment period if you pay for the 5% minimum every month of loaned cash amount.
• Citibank Dial-for-Cash 
• 9.88% for 12 months
• 0.824% per month
• EON Bank Call For Cash
• 1% Cash Back
• One Time Interest 1.99% (after 1% cashback) for 6 months tenure