Best balance transfer credit cards January 2017
The top three 0% balance transfer credit cards to consolidate your post-Christmas debts with as the new year begins.
As you’d expect, credit card use generally skyrockets over Christmas. As such, levels of debt also balloon at this time of year. So it’s not surprising that a number of banks ramp up their 0% balance transfer offers in the post-Christmas period. With the market inflated with a number of competitive debt consolidation options, we’ve rounded up some of the most valuable deals on the market to help you determine which type of balance transfer card is right for you.
NAB Premium Credit Card
NAB was one of the first banks to roll out a 0% for 24 months balance transfer offer in December, making its NAB Premium Card a competitive debt consolidation tool. When you move your debt across, though, you’ll be charged a 3% balance transfer fee. This is a standard fee amongst NAB credit card products but it’s the highest fee out of the three cards compared this month. Any remaining balances at the end of the promotional period will begin to collect a rate of 21.74% p.a, which is also one of the highest revert rates in this month’s roundup. The card also has an annual fee of $90 which will amount to $180 if you keep the card for two years to take full advantage of the entire balance transfer promotion. While this card also comes with complimentary insurances and a platinum concierge service, it’s important to ensure that the cost of the card doesn’t counteract the savings you’ll make from the 0% balance transfer period.
Westpac Low Rate Credit Card
The Westpac Low Rate Credit Card also offers a 0% for 24 months balance transfer promotion for applicants who apply online before 30 January 2017. If you do move your debt to this card though, you’ll be charged a 2% balance transfer fee. If you’re unable to repay your balance in full by the end of the 24 months, your remaining debt will collect a revert rate of 13.49% p.a. While this is higher than the 0% offer, it is considerably lower than most standard revert rates on a balance transfer card. The Westpac Low Rate card also has a lower annual fee of $59 which you’ll need to pay twice if you hold the card for the length of the promotional balance transfer period. You can use this card to transfer debts from up to three non-Westpac credit cards, which could come in handy if you need to consolidate multiple balances after Christmas.
Citi Rewards Platinum Credit Card
The Citi Rewards Platinum Credit Card is a more premium product than the other two in this month’s balance transfer roundup. As a result, this means it comes with higher interest rates and fees. When the 0% for 24 months balance transfer period comes to a halt, the standard rate of 21.74% p.a. will apply. While this is the same as the NAB Premium card, it also has a higher, but reduced, annual fee of $199 for the first year. This means that a standard annual fee of $249 p.a. will apply thereafter and your total annual fee costs will reach almost $450 by the time the balance transfer promotion ends. However, this card does have a lower balance transfer fee of 1.5%, which could be useful if you’re moving a large balance across.
While this card does have a higher interest rate and annual fee, it comes with extra perks such as complimentary insurances and a travel insurance which could come in handy if you plan to use the card beyond the balance transfer period.
How do these balance transfer credit cards compare?
As each of the above cards have identical 0% balance transfer promotions, how can you determine which one is best for consolidating your post-Christmas debt? To help you compare your options, we’ve looked at factors such as the balance transfer fee, revert rate, annual fee and other costs to help you determine which offers you the most value. Of course, the exact costs will vary according to the size of your debt, so we’ve based the following table on the average Australian credit card balance of $3,073.
|Offer||Offer rate and length||Balance transfer fee||Revert rate||Minimum repayment per month to clear balance||Balance transfer fee on typical balance||Annual fee|
|Westpac Low Rate||0% for 24 months||2%||13.49% p.a.||$124.04||$61.46||$59|
|NAB Premium||0% for 24 months||3%||21.74% p.a.||$124.04||$92.19||$90|
|Citi Rewards Platinum||0% for 24 months||1.50%||21.74% p.a.||$124.04||$46.09||$199 for the first year ($249 p.a. thereafter)|
As each of these cards boast a 24-month balance transfer promotion, the amount you’ll need to repay each month to clear the balance in full is the same regardless of the card. However, it’s the revert rates, balance transfer fees and annual fees that act as differentiators here.
For example, if you’re transferring a large balance, you’ll want to consider a card with a lower balance transfer fee to avoid being charged a large fee just for conducting the transfer. In this case, the Citi Rewards Platinum card and its 1.5% balance transfer fee would be the most competitive option.
The annual fee is also important to consider when deciding which balance transfer card is right for you. If the cost of the card outweighs the savings you’ll make from the interest-free period, it isn’t right for you. So, let’s say you have the typical balance of $3,073 and were using the Citi Rewards Platinum Card. Given the card has a standard interest rate of 21.74% p.a. on balances, you would save approximately $1,320 in interest over two years. As the card has a reduced annual fee of $199 for the first year and $249 p.a. thereafter, your total annual fee costs will be $448 for the two years the balance transfer promotion is in place. In this instance, the interest savings of $1,320 easily outweigh this yearly cost. As the Westpac and NAB cards have even lower annual fees, your interests savings would outweigh the cost of the card even further than the Citi Reward Platinum Card.
If you don’t think you’ll be able to repay the entire balance in full before the promotional period ends, you’ll want to look for the card with the lower revert rate. In this instance, that’s the Westpac Low Rate card. While you should aim to clear the debt in full before the promotion ends, a card with a lower revert rate will help reduce your interest costs if do have any remaining debts at the end of the introductory offer.
As you can see, even if several cards have a similar promotional offer, it pays off to compare your options and consider other rates, fees and features to find the right deal for you. If want some relief from post-Christmas debts, consider the length of the promotional period, work with a budget and try to repay the entire amount to get the most out of your card and get your debts under control this new year.
These aren't the only balance transfer credit cards on the market, though. So, to make a more comprehensive comparison, see our balance transfer guide for other cards with 0% promotions for 12 to 18 months.
Our best balance transfer credit cards roundup is a monthly regular that lists and compares current balance transfer promotions on the market. Check back in the first week of every month for the latest deals and the most competitive ways to consolidate your debts.