Balance transfer credit cards with rewards programs
Repay your debt with no interest and earn points on new purchases with a balance transfer credit card that also offers rewards.
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Some credit cards with balance transfer offers also come with reward programs or bonus offers. While the balance transfer can help you pay off your debt faster, the rewards can offer you points per $1 spent on your spending or a one-time cashback or voucher offer.
It's important to note that you won't earn points on the debt you transfer or the payments you make to your balance transfer debt. Use this guide to compare balance transfer credit cards with reward programs and learn about the key factors to consider so that you can decide if this type of card is right for you.
Compare rewards credit cards with balance transfer offers
What are the pros and cons of using a balance transfer credit card with rewards?
- Save money on existing debt. By paying little to no interest on balance transfers for a given time period, you can save considerably in the form of interest, especially if you manage to pay off the entire transferred balance before the introductory period comes to a close.
- Earn rewards. If you use your credit card frequently, you can benefit by earning rewards for your spending.
- Make use of extras. Many of these credit cards come with insurance covers, a concierge service, airport lounge passes and more.
- Temptation to spend. If you've got credit card debt that you're struggling to pay off, it may not be wise to get a rewards card that promises points for more spending. Consider focusing on paying off your debt before making new purchases on your credit card.
- High-interest rate. You can expect a balance transfer card with rewards to charge a high interest rate on purchases, as the introductory balance transfer rate only applies to your existing debt.
- Annual fee. Most of these credit cards charge an ongoing annual fee, and how much you have to pay in annual fees depends on the extras any given card offers.
What else will I need to consider when comparing balance transfer credit cards with rewards?
Keep the following factors in mind to help you decide if this type of card will work for you:
- Balance transfers don’t earn rewards. There are no Australian credit cards that offer rewards points on balance transfer debts.
- Revert rates. Once the introductory period ends, any debt from your balance transfer will attract the revert interest rate. This is usually a high purchase or cash advance interest rate. You should aim to pay your balance in full before you're charged interest.
- No interest-free days on purchases. Interest-free periods for purchases are usually only available if you pay your balance in full by the due date on each statement. So, if you have a balance transfer, this means you'll be charged the purchase interest rate on each new purchase you make.
- Repayments. Your repayments will be allocated based on the part of your balance with the highest interest rate. So, if you're making purchases to earn points and also have a balance transfer, your repayments will go towards your new purchases first. This increases your risk of paying a higher interest rate on your balance transfer debt once the introductory period ends.
- Bonus point spend requirements. You'll usually need to spend a set amount of money in the first few months to be eligible for any introductory bonus points. If you already have a balance transfer debt, meeting this spend requirement increases the risk of having to pay a higher interest rate on it when the introductory period ends.
Getting a balance transfer credit card with rewards can be a good idea if you have a repayment plan in place. Ideally, you should aim to pay off the entire balance transfer debt within the introductory period. After that, you can look forward to earning rewards on new purchases. If you don't think you can pay off both your existing debt and new purchases, you may want to consider just using the card for earning points until you're finished paying off the balance transfer.
With so many different offers available, make sure you compare a variety of credit cards so you can find one that suits your circumstances and goals.
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