Combine credit cards with a balance transfer

Reduce interest and repay your debt faster by using a balance transfer to combine your credit cards onto one account.

With different interest rates and statement due dates to consider, juggling balances on several credit card accounts is usually expensive and hard to manage. What’s more, it can make the debt seem like a never ending part of your life.

When this is the case, one simple solution to consider is a balance transfer. This allows you to combine all your credit card debts and could even give you a low or 0% interest rate during the introductory period. Here, we look at how this debt consolidation option works, and what you need to consider if you want to combine and pay off your card debts for good.

How does combining credit cards with a balance transfer work?

A balance transfer lets you transfer your existing credit card balance(s) onto a new card. Balance transfer credit cards regularly offer low or 0% interest rates for an introductory period, for example “0% interest for 15 months”. At the end of this period, any balance remaining will be charged interest at the standard variable rate for that card.

When you apply for a balance transfer credit card, you can request that some or all of your existing card debts be moved to the new account. If you’re approved, you’ll only have to make one repayment a month, and can enjoy a lower rate of interest on the balance during the promotional period. Combining your credit card debts can also help you save on other costs, such as annual fees. This can assist in reducing your overall debt expenses and make it easier to systematically pay off what you owe.

What to consider before combining credit cards with a balance transfer

Here are some key factors to consider with this type of debt consolidation:

  • Low or 0% interest promotion periods. Balance transfer offers can be as short as three months or as long as two years. The more debt you have, the longer the balance transfer offer you’ll need to consider to help reduce your fees while you pay off the debt.
  • Standard interest rates. Also called the “revert rate”, this refers to the interest rate that will apply once the promotional period is over. Make sure this rate is one you can live with if you think you’ll carry a balance beyond the introductory period.
  • Balance transfer limits. The amount of debt you can transfer is based on the credit limit you’re approved for with the new card. For example, some cards restrict your balance transfer amount to a percentage of your credit limit, such as 75% or 90%. This could have an impact on your transfer if you have a lot of existing debt.
  • Balance transfer fees. Some cards charge a one-off fee for balance transfers, which could be between 1–3% of the total approved transfer. For example, if you have two cards with a combined debt of $6,000, moving it to a card with a balance transfer fee of 2% would cost you $120.
  • Other balance transfer restrictions. Your new card provider may impose its own set of rules around balance transfers, for instance by limiting the number of accounts you can balance transfer at one time, or the type of account you can move across. A more generic restriction might be the inability to transfer balances between affiliated credit card providers, or between cards issued by the same institution. Learn more about which banks you can balance transfer to and from to avoid potential problems.
  • Credit rating. As with all types of credit card, most balance transfer card applications will require that you have a good to excellent credit score. Find out more about your credit file and how to improve your credit score.
  • Ongoing card features. Also consider other features of the card, such as the annual fee and any complimentary extras that may ensure its suitability and sustainability as your long-term credit card.

Saving money by combining credit cards with a balance transfer

To illustrate how transferring credit card debt works, let’s look at Tom who currently has two credit cards he is trying to pay off:

  • Card 1 debt: $2,000 with a 20% p.a. interest rate
  • Card 2 debt: $4,000 with an 18% p.a. interest rate

These cards also have annual fees of $50 and $200 respectively.
Tom is considering consolidating both cards with a balance transfer credit card offer of 0% p.a. for 15 months, with an annual fee of $150. Tom has only been making minimum payments on his current cards. But if he is able to repay the consolidated debt within the interest-free period, in one year he estimates that he will save:

  • Interest: $1,120 (which is $2,000 x 20% + $4,000 x 18%)
  • Annual fees: $100 (which is $50 + $200 - $150)

This is a total of $1,220 in the first 12 months, or $1,400 if factored over 15 months. Note that these figures could vary slightly depending on the minimum payments, but offer an accurate guide to the savings Tom would get by combining his credit cards onto this new balance transfer card.

balance transfer

Steps for combining your credit card debt with a balance transfer

Follow these simple steps if you’re looking to consolidate your debts using a balance transfer.

  1. Find out the total amount of debt you owe. Take inventory of your credit card liabilities by summing them up. It is safer to do this by calling your card company as your previous month’s statement or even your online statement may not reflect accruing interest for the month and other possible impending fees. You don’t want to leave small amounts owing after the balance transfer has been completed. Explain that you wish to do a balance transfer and ask for your total outstanding balance.
  2. Compare balance transfer credit cards. This is an important step, and you should take your time to research the available options on the market. Consider the list of factors outlined above during this process.
  3. Begin the application. Applications are mostly online these days, and take around 10–15 minutes to complete. Make sure that you meet the card’s eligibility requirements, and have all the necessary details on hand.
  4. Include details of your existing credit card debts. It’s important that you get this section of the application correct by filling in the outstanding amounts for each account at the time of applying.
  5. Submit your application. Submit your application and keep those fingers crossed. Most online applications will provide you with an outcome in a few minutes. If your application is successful and you have provided all the required documents, you can look forward to receiving your new card in about two weeks.
  6. Activate the card. Upon receiving your card, activate it by following the attached instructions. This will also activate the balance transfer, which usually takes between 5–10 business days to process.
  7. Confirm the transfers and close your old accounts. Once your balance transfers have been completed, you should see that your previous account balances are $0. Call your former credit card providers and close your old accounts to avoid any further fees or the temptation to use them.

A balance transfer can be very helpful when you’re struggling with multiple credit card debts. If you’ve decided to go ahead with this process, make sure you carefully research the market, compare available card offers and weigh up your options before choosing the right balance transfer credit card for you.

Top balance transfer credit card offers*

Rates last updated September 20th, 2017
% p.a.

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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
NAB Premium Card - Exclusive Offer
0% p.a. for 24 months
19.74% p.a.
$90 p.a.
Until 1 October 2017, exclusive to, enjoy a no BT fee, balance transfer offer with platinum privileges, including travel insurance.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months on eligible spend and enjoy a discounted annual fee of $64 for the first year.
Westpac Low Rate Card - Online Only Balance Transfer Offer
0% p.a. for 24 months with 2% balance transfer fee
13.49% p.a.
$59 p.a.
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% balance transfer fee. Plus, use of the Westpac mobile banking app.
Citi Rewards Platinum Credit Card
0% p.a. for 24 months with 1.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
A long-term balance transfer offer with a range of platinum rewards and benefits.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$99 p.a.
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
Qantas American Express Ultimate Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$450 p.a.
Take advantage of a high Qantas Points earn rate and 2 American Express Airport Lounge entries each calendar year.
HSBC Low Rate Credit Card
0% p.a. for 15 months with 2% balance transfer fee
13.25% p.a.
$55 p.a.
A competitive offer from HSBC featuring a long term balance transfer deal and low ongoing interest rate on purchases.
Woolworths Everyday Platinum Credit Card
0% p.a. for 14 months
19.99% p.a.
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Receive a $50 eGift Card when you apply by 31 December 2017 and make an eligible purchase by 31 January 2018.
ANZ Platinum Credit Card - Exclusive Offer
0% p.a. for 12 months
0% p.a. for 3 months (reverts to 19.74% p.a.)
$0 p.a. annual fee for the first year ($87 p.a. thereafter)
Exclusive to finder, receive 0% p.a. interest on purchases for 3 months and 0% p.a. on balance transfers for 12 months with no balance transfer fee.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$129 p.a.
Earn 3 bonus Velocity Points per $1 for the first 3 months, a first year annual fee refund and a yearly $129 Virgin Australia Gift Voucher.
American Express Essential®  Credit Card
0% p.a. for 12 months with 3% balance transfer fee
14.99% p.a.
$0 p.a.
Receive a $50 credit when you apply online, are approved and spend $750 on your new card within the first 3 months of card membership.
NAB Low Fee Card
0% p.a. for 16 months with 2% balance transfer fee
19.74% p.a.
$30 p.a.
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
Virgin Money Low Rate Credit Card
0% p.a. for 12 months
11.99% p.a.
$99 p.a.
Receive up to 44 days interest-free on purchases and the optional insurance coverage of CreditShield Edge.
ANZ Low Rate Platinum
0% p.a. for 16 months with 2% balance transfer fee
11.49% p.a.
$99 p.a.
Enjoy platinum benefits with exclusive discounts, complimentary travel and purchase insurances and a 24/7 personal concierge.

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