Imagine what you could achieve in 2 years.
If you're struggling to repay a high-interest credit card debt, you could use a 24-month interest-free balance transfer credit card to clear your debt without the burden of additional interest for two years.
If you're looking for a way to consolidate and repay your credit card debts, you can use this guide to understand how they work, compare your options and apply for a credit card with a market-leading balance transfer offer of 0% for 24 months.
0% p.a. for 24 months on balance transfers with no BT fee
$0 annual fee for the first year
Offer ends 13 December 2017
Eligibility criteria, terms and conditions, fees and charges apply
St.George Credit Card Online Offer
A platinum card that features a no BT fee balance transfer offer, first year annual fee waiver and a low variable interest rate on purchases.
- $0 p.a. annual fee for the first year ($99 p.a. thereafter).
- 12.74% p.a. on purchases
- Cash advance rate of 21.49% p.a.
- Up to 55 days interest free
Comparison of 24 month 0% p.a. balance transfer credit cards
Find out how balance transfers work in 60 seconds
What is a 24 month balance transfer credit card?
You can use these cards to transfer a balance from an existing credit card (or cards) to a new card with a promotional interest rate for 24 months. Depending on the card, this means that you'll be able to pay down your debt at a low or 0% interest rate for 24 months. Without the burden of high interest (or any interest at all, in many cases) you'll be able to pay off your debt faster and could save hundreds to thousands of dollars. The 24-month balance transfer promotion is one of the longest of its kind on the market, so it gives you the maximum amount of time available to pay off your existing credit card(s). However, once the promotion ends, any remaining balances will continue to earn interest at the standard purchase or cash advance rate.
Each month, you'll be required to pay the minimum repayment amount. However, if you want to pay your entire balance before the promotional period ends, you'll need to pay more than that. This promotional interest rate only applies to balance transfers, so you'll have to pay the regular interest rate on any purchases or cash advances you make with the card.
What should you look for in a credit card that offers a 24 month balance transfer?
As there are a few 24 month balance transfer credit cards available on the Australian market, these are a few factors you can consider to compare your options and determine whether or not this type of card is for you:
- The promotional interest rate. Depending on the credit card, the balance transfer interest rate could be a low ongoing rate or 0% for the 24 month period. While a card with a 0% interest rate might seem more appealing, it might come with a higher annual fee or balance transfer fee that could offset the savings in interest that you'd make. You can look at how much debt you owe before you conduct the balance transfer and calculate how much you'd need to allocate every month to pay off your debt in full before the promotion ended to determine which option is right for you.
- Annual fee. Basically, the more features your card has (such as platinum cards), the higher the annual fee. Again, it's important to make sure that the interest savings exceed the annual fee. If it doesn't, you might want to consider a balance transfer card with a low or no annual fee.
- Balance transfer fee. You may have to pay a balance transfer fee when you move your credit card balance from one account to another. This charge is normally a percentage (usually between 1% to 3%) of the balance. This means that the higher the amount you want to transfer, the higher the fee. This fee is added to the principal balance transfer amount and will collect the same 0% or low interest rate for the term of the offer.
- Standard interest rate. Unfortunately, the promotional low or 0% balance transfer rate will only be in place for the first 24 months. After this time, the remaining balance will collect a standard cash advance or purchase interest rate. This usually sits between 19% and 22%, so it's important to understand what rate applies in case you can't pay your entire balance before the promotion ends.
Pros and cons of a 24-month balance transfer credit card
- Lower interest. Whether the card has a low or 0% promotional rate, it's a much more cost and time effective way to repay your debts rather than with the higher interest of a standard card.
- Long repayment period. Balance transfers generally last between 6 and 24 months, so this is the longest repayment period available for low balance transfer offers. As long as you understand how much you need to repay each month, it should be a generous time frame to repay any existing loans before the interest applies.
- Standard rate applies to new purchases. Avoid buying new items using this credit card because the standard rate applies. As your repayments go to the debt that's collecting the highest interest, you’ll need to pay the interest for new purchases first. As interest-free days only apply if you're not carrying a balance, you won't be able to take advantage of these until you've completely repaid your debt.
- Revert rates. The low or 0% promotional interest rate is only in place for the promotional period, after which a much higher interest rate applies to any remaining balances.
Frequently asked questions
Do balance transfer cards offer rewards?
Some balance transfer credit cards do offer rewards, but you can't earn reward points on balance transfers. So, unless you're planning on using the card after you've repaid your debt, it's wise to concentrate on paying off your debt rather than making purchases to earn points.
What if I can pay off the debt in less than 24 months?
If you pay your debt in less than 24 months, you can either close the card or continue using it for purchases or emergencies. These cards usually have a higher interest rate on purchases, so you might want to go for a low rate option if you're not confident you'll be able to pay it off in full each month.