Clear your existing credit card debt without paying interest and annual fees. Find out which card will save you the most money today.
If you’re carrying debt on an existing credit card, chances are you’re also getting bled dry by the compounding interest fees on your account. A high-interest rate can have you trapped in debt for far longer than desirable, and if repaid over an extended period, you could even end up paying more money in interest fees than your initial loan principal.
This is where a balance transfer credit card can really come in handy, by creating the breathing space you need pay down your debt without the interest penalties. An annual fee waiver only sweetens the deal and maximises your savings. All this money saved, if put towards repaying the debt, will also mean you can achieve debt freedom sooner! Read on to learn all you need to know about getting your new $0 annual fee and 0% balance transfer credit card.
Compare balance transfer credit cards with $0 annual fee
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What is a credit card with a $0 annual fee and 0% balance transfer
This card is designed to let you pay down your credit card balance without the extra costs of interest or an annual fee. It essentially lets you transfer an existing credit card debt from one or more cards onto your new card, where you can enjoy 0% interest on the loan for a specified promotional period, usually between 6 and 20 months. Some cards offer $0 annual fees for life while others waive it for a promotional period. A balance transfer fee may also apply (typically between 1 and 3% of your transferred debt amount), but this can be offset by your interest and annual fee savings.
How to compare credit cards with $0 annual fee and 0% balance transfer
You should always research the various offers available before deciding on a card. When it comes to comparing cards, these are the major factors to consider:
- Annual fee waiver. Some cards offer an annual fee waiver for the entire life of the card while others only waive it as a promotional offer. In the latter case, you should know when the annual fee will kick in (for example, in the second or third year) and how much it will cost from then on.
- Balance transfer period. Consider the length of the promotional offer (such as, 0% interest for 6 months vs. 0% interests for 18 months), because the interest fees saved over a longer period can be substantial. Make sure that you can repay your entire balance before the promotional period ends, otherwise your remaining balance will collect the revert interest rate.
- Revert rate. The revert rate is typically the high interest purchase or cash advance rate that kicks in once the promotional period ends. This is particularly important if you’re uncertain of being able to clear your full debt within the promotional period.
- Balance transfer fee. This is a one-time fee that you may have to pay to move your balance over to the new card. There are credit cards that omit this fee, but some cards charge up to 3% on your balance transfer amount, which could mean a fee of $300 on your $10,000 debt. This is usually a small amount compared to the interest fees you will save, but should be factored in nonetheless.
- Balance transfer amount. Some credit cards will allow you balance transfers up to 100% of your new credit card limit, while some may impose a balance transfer limit. Some cards, for example, only let you transfer a balance up to 90% of your card limit on the new credit card. This can be an important consideration if your existing debt is a large amount and you’re not sure what your new approved credit limit will be.
- Purchase rate. This is the interest rate for new purchases made on the card. Be careful about making new purchases on your balance transfer credit card because you will not be eligible for interest-free days when carrying an outstanding balance and all repayments will go directly to your purchases if it’s collecting the higher interest rate.
- Cash advance rate. Cash advances, such as ATM withdrawals, usually carry a higher interest rate of around 20% to 22%. Cash advances collect interest immediately and often incur a cash advance fee too, so you might want to avoid them if you’re trying to save on interest and consolidate your debt.
- Other features. Consider other card features like the complimentary extras that may be offered, as well as the ability to earn rewards on the card. Complimentary extras often include travel insurance covers and purchase protection policies. While you shouldn’t be using the card to make purchases or earn reward points while paying down a balance transfer, these features could be of interest if you plan to continue using the card after your debt has been repaid.
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How to apply for a credit card with no annual fee and 0% balance transfer
Once you’ve compared your options and decided which card you want, you can apply online. This can take mere minutes if you have all the necessary information and documents ready, but more importantly, you must meet the card’s eligibility criteria to successfully apply:
- Age. You must be at least 18 years old to apply.
- Residential status. You must be an Australian citizen or permanent resident, although some credit cards allow certain visa holders to apply.
- Annual income. Each credit card has its own stipulated annual income requirement, generally starting from $15,000 p.a. upward. Ensure that you satisfy this requirement before applying.
- Credit history. You must typically have a clean credit history and a good or very good credit score to be successful in your application.
Necessary information and documents
- Proof of identification. You will need to provide a copy of your driver’s licence and/or passport.
- Financial information. The application form will ask for financial details and you may also be asked for bank statements and/or other financial documents.
- Employment details. You’ll be asked to provide details of your current and previous employment, as well as your employer contact details. You will also need to provide recent payslips and sometimes your employment contract. If self-employed, you will generally be asked for your tax assessment notice and other proof of income.
- Assets, liabilities and expenses. The application will ask for details of your assets, liabilities and expenses, and you may need to furnish proof of listed assets and liabilities.
- Credit limit and balance transfer. The application will also ask for your desired credit limit, and the requested amount of your balance transfer. You will need to provide the account details of your current credit card(s) from which you wish to transfer your balance(s).
When choosing your new $0 annual fee and 0% balance transfer credit card, it is advisable to forecast a strict repayment schedule to ensure that you can successfully pay off your full debt within the promotional period offered by the card. Make sure your savings on the new card also outweigh all possible future fees, so that the balance transfer ultimately proves worthwhile for you. Once your new card is approved, start chipping away at that old debt without having to worry about interest or annual fees!Back to top