Want to save money on interest charges and pay off debt faster? Read this guide to find out how a 0% balance transfer credit card can help.
0% balance transfer credit cards let you move debt from an existing card to a new card that offers no interest charges on the balance during the introductory period. With 0% interest on the debt, you can save more and pay off your credit card debt faster. Here, you’ll find out more about 0% balance transfer cards, including how they work and how to compare them to make the most out of these offers.
0% Balance Transfer Credit Card Offer
The NAB Premium Card features a balance transfer promotion with a range of platinum benefits.
- 0% p.a. on balance transfers for 24 months on a new NAB Premium Card. BT reverts to cash advance rate after promotional period.
- A one off 3% BT fee applies.
- Receive a range of complimentary insurance covers including overseas travel insurance and 24/7 NAB Platinum Concierge Service.
- Request an additional cardholder at no extra cost.
0% Balance Transfer Credit Cards Comparison
The finder.com.au best* 0% balance transfer credit cards
Compare the balance transfer offers below and receive extra benefits.
|Credit Card||Balance transfer rate||Feature|
|Citi Rewards Platinum||0% p.a. for 24 months||Get a long term balance transfer offer and earn 1.25 Citi Rewards Points per $1 spent on eligible purchases.|
|St.George Vertigo Platinum||0% p.a. for 12 months||Receive 0% p.a. for 12 months on balance transfers and make everyday purchases with a 0% low interest rate for 6 months.|
|Bank of Melbourne Vertigo Platinum||0% p.a. for 12 months||Enjoy 0% p.a. for 12 months on balance transfers and 0% for 6 months on purchases.|
|Virgin Australia Velocity Flyer Card - Balance Transfer Offer||0% p.a. for 18 months||Get 0% p.a. for 18 months on balance transfers and earn Velocity Points for every $1 spent.|
This balance transfer guide explains
Follow the steps to learn, compare and apply for a balance transfer offer.
What is a 0 balance transfer credit card?
0 balance transfers let you transfer your existing credit card debt to a new credit card with a 0% interest rate for a promotional period. Once the introductory offer has finished, the balance transfer interest rate will revert to a higher standard rate.
How do 0 balance transfer credit cards work?
When you apply for a balance transfer credit card, you can request to move your high interest debt to the new card. If your application is approved, your new provider will settle the balance on your old card and transfer it to your new account. Once your balance has moved to the card with a 0% balance transfer offer, it will not collect interest during the introductory period. This means you can pay down your balance without collecting more debt for a promotional period of up to 20 months depending on the card. Not only can you pay down your debt faster, but you could save hundreds or thousands or dollars on interest charges at the same time.
Could you save money? – Normal credit card vs. 0 balance transfer cards example
If you have a credit card debt of $1,000 and you make $100 repayments per month, a balance transfer offer can help you regain control of your finances and save.
|Normal credit card without balance transfer offer||0% balance transfer credit card|
|Interest rate||20% p.a.||0% p.a.|
|Months required to repay||12 months||10 months|
|Interest paid over this period||$200||$0|
Once the 0% balance transfer period offer finishes, a higher standard interest rate will apply. So if you're unable to pay off your debt before the introductory offer ends, your remaining debt will be charged the standard variable interest rate for balance transfers.
Your current stage in choosing a balance transfer offer
How to compare 0 balance transfers credit cards
Here are the most important factors you should keep in mind to find the best* 0 balance transfer card to consolidate your debt:
- Length of the balance transfer introductory offer. The 0% interest period on a balance transfer card can range from 3–20 months. The more debt you have, the longer you want the introductory period to be so you have more time to pay it off.
- How much you are allowed to transfer. Depending on the bank, you could be able to transfer up to 95% of the approved credit limit. This means that if a credit card's maximum credit limit is $40,000 you will be able to balance transfer up to $38,000 to this card if approved for the maximum limit. Refer to our guide on each bank's balance transfer limit and how much they will allow you to balance transfer.
- Make sure you can transfer to the new bank. You won't be able to balance transfer between some banks, such as St.George and Bank of Melbourne, since they belong to the same credit provider. Refer to our guide on which banks you can balance transfer to, so your balance transfer request is successful.
- Balance transfer revert rate. At the end of the balance transfer promotion, the 0% interest rate will revert to a higher standard variable rate (usually the cash advance rate). This means any balance that remains after this time will be charged interest, so the length of the 0% interest offer is incredibly important when comparing cards.
- Rewards. Credit card rewards are earned based on how much you spend on the card, so they are not usually a priority when you want to pay off debt. But if you want to earn rewards in the future, considering this feature when you apply for a 0% balance transfer could save you adding another card to your wallet later on.
- Complimentary extras. Many credit cards come with perks such as complimentary international travel insurance, extended warranties and purchase protection insurance. These benefits can add value to a card but are usually less important when compared to features such as the balance transfer offer and ongoing fees.
- The purchase rate. If you plan to make new purchases on the card before or after you’ve cleared your debt, check the purchase rate. Note that this rate will be applied from the day of the transaction when you carry a balance. If you want to make purchases whilst repaying a balance transfer, some cards offer both 0% on balance transfers and purchases. If you're paying down a debt, avoid using your card for purchases until you've repaid the entire balance.
What is the catch (hidden costs) with a 0% balance transfer credit card?
While you don’t pay interest on the debt you move to a 0% balance transfer card, there are a number of other fees you should be aware of before you apply. Some of the most common costs include:
- Balance transfer fee. Banks may charge a 1-3% fee for your balance transfer, which is based on the total balance transfer amount. You can check if the card you're applying for charges a balance transfer fee by using our balance transfer credit card reviews or by reading the fine print.
- The annual fee. As any credit card can offer a 0% balance transfer deal, the annual fees can range from $20 to $400 or more. There are also some credit cards that charge no annual fee for life, and others that reduce or waive the annual fee in the first year, so make sure you choose a card with an annual fee that suits your budget.
- Minimum repayments. Even though the card charges 0% interest, you will still have to pay at least the minimum amount required for each statement period. Paying the minimum repayment might not be enough to clear your balance before the end of promotional period, so make an effort to pay as much as you can each month.
- Interest charges for new purchases. When you make a purchase on a 0% balance transfer card, the purchase rate will be applied to it from the day the transaction is made. Your repayments will also go towards the debt that attracts the highest interest rate first. In this case, that is your purchases instead of your balance transfer. You can avoid these interest charges by not making purchases on the card until you have cleared the existing debt.
- Late payment fee. Some credit card issuers, including American Express, CommBank and Westpac, may charge a fee of between $9-$30 for payments made after the due date on your statement.
Depending on the 0% balance transfer card you choose, other fees and charges may also apply in some circumstances. Make sure you check the standard terms and conditions for individual cards before you apply.
How to apply for a 0% balance transfer offer
These simple steps will help you find and apply for a 0% balance transfer offer that fits your budget and your needs.
- Check your total amount of debt owed
Consider how much debt you want to transfer, and how long you think it will take you to pay it off so that you know what kind of offers will help you achieve your goal.
- Compare 0% balance transfer offers
Look at all the different features and types of balance transfer offers, weighing them up based on your habits, lifestyle and current financial goals. Use the comparison table to weigh up your options side by side.
- Apply online
Hit the ‘Go to site’ button and you will be redirected to the credit card’s secure application page.
- Fill out the application form
You will need to provide personal details including your full name, date of birth, street address, driver's licence number and/or passport number. Keep these documents handy, and submit copies as requested by the credit card issuer.
- Include details of the balance transfer request
There is a section of the credit card application that asks for details of any balance transfer requests. You will need to fill this out with information including the current credit card company, the account number and the total amount of debt you want to transfer to the new card.
- Submit the application
You should get a response almost immediately. You may be required to provide supporting documentation as part of this process. When you receive your card and activate it, your new provider will process the balance transfer from your old card to the new one.
Your current stage in choosing a balance transfer offer
Applying for a 0% balance transfer can be a daunting task. We have answered the most popular questions from our users about applying and using a 0% balance transfer credit card here. If you still have a question please leave a comment in the "Ask a Question" box below and one of our friendly staff will respond to your query.
Q&As - Applying for 0% balance transfers
Q. What is a 0 balance transfer?
A. "0 balance transfers" provide you with 0% interest on your credit card debt for a promotional period. This allows you to make repayments interest-free for a limited amount of time. At the end of the promotional period, the 0% interest rate reverts to a higher standard interest rate that will apply to any remaining debt from the balance transfer.
Q. Is a balance transfer worth it?
A. Balance transfer offers can provide you with a way to manage your existing debt and everyday expenses. If you have an existing credit card debt and want to pay less interest, then a 0 balance transfer offer could suit your needs.
Q. Is it bad to transfer a credit card balance?
A. Balance transfers generally provide positive value to cardholders, allowing them to repay their existing debt with less interest. The pitfalls of using balance transfers include not planning your repayments and applying for balance transfers successively. Applying for multiple balance transfers can look bad on your credit file and give negative signals to banks.
Q. Can you transfer a credit card balance to another person's credit card?
A. No. Balance transfers between two separate cardholders are not permitted.
Q: Can you transfer a balance between partners/ spouses?
A. This is usually possible if both you and your spouse have a joint account before requesting the balance transfer. Refer to our guide on joint balance transfers to consolidate your debt with a partner.
Q. Do I have to pay anything during the balance transfer promotion?
A. Yes. You will still have to make minimum monthly repayments. This is usually 2-3% of the entire balance. But with a 0% balance transfer offer, your entire repayment will go towards the debt, rather than interest charges.
Q: How long does it take to receive the credit card and when is the balance transfer process complete?
A. Once the application process is complete and you have been approved, the new credit card will be issued. This generally takes between 5-10 business days, but it could be as many as 21 days before you receive the card.
After you get the card, you will need to activate it so that your new issuer can begin the balance transfer process. It could be as long as 21 business days from card activation before the debt is moved from your old card to the new one.
Q: Can I transfer a personal loan to a credit card?
A. Yes, certain banks allow you to transfer a personal loan debt to a new credit card. Refer to our guide here for the eligible banks and credit cards you can transfer to.
Q: Can I transfer an overseas credit card debt to an Australian credit card?
A. No. Unfortunately this type of balance transfer is not permitted.
Q: Can I request a balance transfer after submitting my application?
A. Most balance transfer offers must be requested at the time of application in order to get the promotional low or 0% interest rate. But some banks also allow a balance transfer to be requested after you have submitted your application.
Q: How long does the 0% offer stay in place for?
A. The length of the 0% interest period varies between cards. For example, if a card offers 0% interest for 12 months, you will have 0% on your balance for up to 12 months from when the card is activated. To get the full value from the 0% interest rate, pay off as much as you can as soon as possible. This will help you repay the balance in full before the promotion ends.
Q: Is there a balance transfer fee?
A. A balance transfer fee is a one–off charge that some bank's apply for transferring your debt to the new credit card. This fee is usually 1-3% of your entire debt amount and is charged on the first bill. Not all credit cards charge a balance transfer fee, so check individual offers to see if it applies.
Q: Do I have to transfer the whole balance from my current card to a 0% balance transfer card?
No, you can choose to transfer a portion of the balance. Just select the amount you want to transfer during the application process (and make sure you have a payment plan in place). Keep in mind that this will mean that you have two separate debts and card fees to manage.
Q&As - Using 0% balance transfers
Q: Can I make purchases whilst repaying my credit card balance?
A. Usually interest-free days are not available on purchases when you have an outstanding balance. As a result, any purchases you make will accumulate interest at the purchase interest rate whilst using a balance transfer offer. If you would like to make purchases with no interest whilst repaying your existing credit card debt, compare 0% balance transfers and 0% purchase credit cards.
Q: What happens to my old credit card?
A. Your old credit card will remain active until you cancel it. If you want to cancel your old credit card, wait until the balance transfer process is complete and submit a request to your old bank.
Q: Which transactions do my repayments go to first? Purchases, cash advances or my balance transfer debt?
A. Credit card repayments go to the highest rate of interest first. When you have a low interest/ 0% balance transfer promotion, all repayments will go towards purchases and cash advances before your balance transfer debt. As a result, it is ideal to avoid making purchases or cash advances when using a balance transfer.
Q: Can I transfer my balance again to a different bank?
A. If your balance transfer promotion has ended and you still have an outstanding balance, you can apply for another balance transfer credit card. This will be subject to approval based on the bank's lending criteria. Keep in mind that too many credit card applications can negatively impact your credit history and your ability to get a credit card application approved. You may like to consider a long term balance transfer for more time to repay your balance.
Q: Do I have to make repayments?
A. You still have to pay the minimum repayment for the card by the due date on each statement. This is usually 2-3% of the outstanding debt on the card. Paying only the minimum amount required is unlikely to clear your debt before the end of the promotional period. If you want to avoid paying interest on your debt, calculate how much you need to put towards the debt each month to repay it in full by the end of the offer and stick to that budget.
Mistakes to avoid when using 0% balance transfer credit cards
In some cases, 0% balance transfer cards can end up being as expensive as any other option. Keeping the following pitfalls in mind will help you get the most out of a 0% balance transfer card.
- Only making minimum repayments. The minimum payment listed on your credit card statement is usually 2–3% of your total balance. If you only pay this each month, you will still have a huge amount of debt left over when the 0% interest period ends (and it could take years or even decades to pay off the rest).
- Not paying off the full balance before the introductory period ends. A higher standard balance transfer rate will be applied to any balance left over once the 0% interest period ends, leading to extra charges and increasing the time it will take for you to pay off the debt.
- Using your card for new purchases. Any new purchases on a balance transfer card will be charged interest from the day they are made. Usually the purchase rate is much higher than the balance transfer rate. This means repayments will go towards paying off the debt from purchases before the balance that you transferred. This could leave you with outstanding debt at the end of the balance transfer offer, which would then attract a higher interest rate. To avoid this, you could consider a 0% purchase credit card for emergencies.
- Not checking credit limit requirements. Depending on the credit card issuer, your balance transfer can only make up between 70% and 95% of the approved credit limit on the new card. Make sure you consider this before applying for your card, and try to choose one that has the most reasonable requirements and credit limit options for your circumstances. Learn more about credit limits and balance transfers here.
- Not making payments during the balance transfer process. You will still need to make any payments that are due on the old card before the balance is transferred to a new card, otherwise you could be charged late payment or dishonour fees.
- Applying for balance transfers too frequently. If you are unsure how long it will take to repay your credit card debt then a longer balance transfer may be more beneficial. Credit card applications are added to your credit file record and only reset every five years. Applying for credit cards more than twice a year may hinder your chances of being approved next time.
Before applying for a balance transfer, make sure to read the eligibility requirements and consider the common mistakes people make so you can improve your chances of approval.