Pay off your debt faster with 0% interest for up to 24 months on a balance transfer credit card.
Use this guide to learn how balance transfers work and how they can save you money on credit card interest payments. We also look at the different types of balance transfer cards available in Australia; how to compare balance transfer cards to pick the best one for you; common concerns about these cards; mistakes to avoid with balance transfers; and how to increase the chances of your application is successful. You can calculate your potential savings with a wide range of cards in Australia using the table below.
0% p.a. for 24 months on balance transfers
Exclusive to finder.com.au
Offer ends 12 November 2017
Eligibility criteria, terms and conditions, fees and charges apply
Exclusive finder.com.au Balance Transfer Offer
The NAB Premium Card features a range of platinum benefits and a long-term balance transfer offer exclusive to finder.com.au.
- 0% p.a. on balance transfers for 24 months on a new NAB Premium Card. BT reverts to cash advance rate (currently 21.74% p.a.)
- No balance transfer fee when BT requested upon application.
- Receive seven complimentary insurance covers including overseas travel insurance, plus, access to the 24/7 NAB Concierge Service.
- Request an additional cardholder at no extra cost.
- Must apply through finder.com.au to take advantage of this offer.
Balance Transfer Credit Cards Comparison
What is a balance transfer?
A balance transfer is the process of moving your existing debt to a new credit card with a different bank that offers a lower interest rate for an introductory period. Generally, this promotional interest rate is 0% for a set period that varies from 6 to 24 months.
Which type of balance transfer card is right for me?
finder's money expert Angus Kidman answers the ins and outs of a balance transfer
Answers to the most common balance transfer questions and concerns
How do I apply for a balance transfer credit card?
You usually need to request a balance transfer when you apply for a new credit card if you want to take advantage of a promotional 0% interest rate. Generally, there is a section on the application that asks if you'd like to transfer existing debt to the new account. You'll need to include the details of your existing credit card debt on the application – including the account number, the issuer's BSB and how much you want to transfer. If you're successful, your debt will be automatically moved over to your new account after you have activated the new card.
What is a balance transfer fee?
A balance transfer fee is a one-time fee that may be applied when you request a balance transfer, particularly if you're applying for a card with a long 0% promotional period. This fee is calculated as a percentage of the debt you transfer to the new card and is usually between 1% and 3%. For example, if you had a $20,000 debt, a 3% transfer fee would cost you $600. This $600 would be added to the balance and is usually also eligible for the 0% promotional interest rate.
How much money can I save with a balance transfer?
The amount you can save depends on the specific features of the balance transfer offer, the credit card and the amount of your existing debt. But you can see how much you'll save on interest charges by using the balance transfer comparison tables on this page. Simply enter the amount of debt you're transferring and the current interest rate you're paying on your existing card and the calculator that's built into the table will show you how much you'll save over the promotional period in the "interest saved" column.
Exactly how much you'll save will depend on the size of your debt, the length of the 0% balance transfer offer and your repayments but you could save hundreds or thousands of dollars in interest while you clear your debt. This is why it's important to compare credit cards with balance transfer offers before you apply to see what the promotional rate is, how long it lasts and other fees that apply (such as a credit card annual fee or balance transfer fee).
Do I have to contact my old bank and new bank to make the switch?
Your new card issuer manages the balance transfer process after both your card and the balance transfer are approved. You just need to provide details of your existing card when you apply. But if you want to close your old card, you'll need to do that yourself by contacting your bank. If you don't close your old account, you could be stuck with annual fees and any other maintenance costs that come with your existing account.
What's in it for my new credit card issuer?
Credit card issuers make money when you pay interest, so why would they charge 0% when they could charge 20% or more? Here's why:
- You'll eventually revert to a higher rate. If you don't pay off your entire debt during the promotional period, you'll end up collecting interest at the standard rate for your card. This is usually the purchase rate or cash advance rate, which can range between 9% and 22%. Once that happens, your new credit card issuer can potentially make hundreds or even thousands of dollars from you in interest charges.
- Persuading you to switch is tough. Australians are reluctant to switch banks and it's often expensive for banks to acquire new customers. Offering a discounted interest rate is one of the cheapest ways for banks to attract potential customers. It's essentially a cheap form of marketing.
- You'll still have to pay interest on new purchases. While you might enjoy 0% interest on your balance transfer debt, the standard variable interest rate for purchases will usually apply to any new purchases you make while you're paying off that debt. This is because most credit cards don't offer interest-free days on purchases if you're carrying a balance, which means adding new charges to your card could make it harder to save on interest and pay off your debt before the introductory period ends.
Can I do a balance transfer with my existing credit card issuer?
No, you typically can't perform a balance transfer while staying with the same institution. You also can't perform a balance transfer to other banks within the same group or owned by the same organisation. For instance, you can't transfer from St.George to BankSA and Bank of Melbourne as they're owned by Westpac. Check our complete list of which credit card issuers won't allow transfers between each other to discover which issuers will accept your balance transfer.
Are there any hidden catches involved in a balance transfer?
Credit card issuers have to provide full details about a balance transfer. But here are two key details to remember that could help you avoid snags:
- Reverting interest rate. The promotional rate for your balance transfer is locked in, so you won't have to pay higher interest rates during the offer. When the promotional offer ends, a higher revert rate will apply to any remaining debts.
- Minimum payments. Even if the card offers a 0% balance transfer rate, you will still have to make the minimum repayment each month. If you only make the minimum repayment, you likely won't clear the entire debt before the promotion ends. Once it finishes, any remaining debts will start collecting interest and your balance will continue to grow.
Hundreds of thousands of Australians arrange balance transfers each year, and the process is safe. However, our guide to avoiding common mistakes with balance transfers will help you use your new card effectively.
Can I take advantage of interest-free days on a balance transfer credit card?
Most credit cards offer a set period of interest-free days as a standard feature of the card. You can usually only take advantage of interest-free days when you've paid your balance in full. So, if you're still repaying your balance transfer, you won't be able to get the interest-free days that usually apply to purchases.
Can I request a balance transfer after submitting my application?
Yes, it is possible to transfer a balance after you've applied for the card. However, the exact terms and conditions of doing this vary between the banks. It's best to contact your bank directly to discuss your option but you can compare some of the banks processes below:
- Citi. You can apply for a balance transfer within up to three months after approval and will still be able to take advantage of the promotional offer.
- NAB. NAB allows cardholders to apply for a special introductory rate for a limited time. The balance transfer promotion is only available when you complete the balance transfer at the time of the credit card application.
- Virgin. You can apply for a balance transfer offer within 30 days of card approval.
- Bankwest. You can apply for the balance transfer offer, but the length of the offer will be impacted by the date you apply for it. So, let's say the card offers 0% for 18 months. If you apply for the balance transfer 3 months after card approval, you'll only be able to take advantage of the offer for 15 months.
- ANZ. ANZ will not offer the promotional 0% balance transfer offer once you've applied. Instead, you'll be given the balance transfer offer that is offered to existing cardholders, which usually involves less competitive interest rates and offers fewer savings.
Can I get a balance transfer for a personal loan or store card?
While most balance transfer deals are for credit card debt, some credit card issuers will let you transfer debt from a personal loan or store card as well. You can use our guide to learn more and compare credit cards that offer personal loan balance transfers.Back to top
How to do a balance transfer in five steps
Follow these five steps to successfully apply for a balance transfer credit card and improve your chances of approval:
- Find a balance transfer offer that meets your needs. Use our comparison tables to easily compare credit cards with balance transfer offers and see how much you could save. Enter your debt details and click on the "Amount saved" column to see which cards could offer you the greatest savings, or click on "Advanced Search" to narrow your search down even further.
- Check how much you're eligible to transfer. The amount you can transfer to your new account usually varies between 80% and 100% of your approved credit limit. So, if you can only transfer 80% of your $10,000 credit limit, you'll only be able to transfer up to $8,000. To get the most accurate details of your debt, contact your existing credit card provider and ask for balance details that include interest charges, annual fees, direct debits or any other costs that may be applied before the balance transfer is complete. Balance transfer times vary but as a guide, it's good to allow an extra 10-15 business days from when your new card is approved. You'll also need to make sure that you've selected a new card that accepts transfers from your current bank and card.
- Submit your application. If you've found a balance transfer credit card that is right for you, you can click on the "Go to site" button to be directed to a secure online application. Remember to include the account details and balance transfer amount during the application to make sure you're eligible for the promotional 0% interest rate. Check out our guidelines for successfully applying to maximise your chances of approval.
- Wait for your application to be approved. Some banks can process your request and offer approval within 60 seconds of applying but others may take between 5-7 days. If you haven't heard from the bank after this time, you can contact them to find out if there's an issue.
- Confirm transfer and close your old account. This is not a requirement, but once your new card is set up, contact your old bank and make sure the previous account is closed to avoid any further fees or interest payments. Now it's time to start repaying your debt. Use our tips for paying off your credit card debts faster to clear your debt and maximise your interest savings.
How can I compare credit card balance transfer offers?
There are lots of balance transfer card deals available in Australia, so how can you pick the right one? These are the crucial features you must compare when looking for maximum savings. We include all these features when calculating your total interest saved:
- Balance transfer interest rate. This is the interest rate that will be charged on the balance transferred to your new card. Most 2017 balance transfers offer 0% interest rates for a promotional period of up to 24 months. But some cards may charge a higher rate than this or have a shorter introductory period. Either way, if it's temporary, this rate is usually referred to as the "promotional rate" or "introductory offer".
- Promotional period. The promotional period refers to how long the low-interest rate applies. Depending on the card, this could range from 6 to 24 months. Once the promotional period expires, you'll pay a much higher rate (the "revert rate"). The longer the promotional period, the more time you have to clear your debt.
- Revert rate. After the promotional period ends, the remaining debt will be charged interest at the higher "revert rate". Typically, this is the standard cash advance or purchase rate and ranges from 12% to 22%. It's also sometimes referred to as the "standard balance transfer rate". If you don't think you can repay your entire debt before the promotional period ends, you should look for a card with a lower revert rate to minimise your interest costs.
- Balance transfer fee. This is a one-time fee, that is sometimes charged as a fixed percentage of the debt you transfer to your new card. Typically, this ranges from 1% to 3%. Balance transfer fees are often charged for balance transfer deals with longer promotional periods, such as those offering 0% interest for 24 months. Try and avoid them if possible or at least make sure that they don't outweigh the interest savings you'll make from the 0% balance transfer offer. You can use the "Amount saved" column of our comparison table to compare potential savings on cards with and without balance transfer fees.
- Annual fee. Most balance transfer offers charge an annual fee, starting from when the account is opened. Some credit card issuers waive this for the first year. The annual fee is treated as a purchase and incurs the same interest rate as other purchases you make with the card. If there's a promotional 0% purchase offer in place, your annual fee won’t accrue any interest until the promotion ends. To get maximum value from your card, make sure that the interest savings you make from the 0% balance transfer offer outweigh the annual fee.
These card features are less important when you're paying off existing debt but are still worth factoring into your comparison:
- Purchase rate: This interest applies to any new purchases made on the card. While this is usually 12% or more, some credit card issuers offer a promotional 0% rate on purchases as well. You can check out a full list of cards with that feature here. While it's best practice not to use your card for purchases while you're consolidating your debt, you'll want to pay attention to the purchase rate if you plan to use the card for purchases once the balance transfer offer ends and you've repaid your debt.
- Other benefits: Cards may offer additional benefits such as the ability to earn reward points or free insurance for travel booked on the card. These could be tie-breakers when comparing two similar cards but shouldn't form the basis for your decision when comparing balance transfers.
Why might my application be refused?
Financial institutions assess balance transfer applications carefully. To increase your chances of approval, see some of the factors that could cause a bank to decline your application before you apply:
- Poor credit history. You'll need a good credit history to obtain a balance transfer deal. If haven't checked your credit history in a while, you can order a free copy of your credit score here. However, if you have a poor credit history due to missed payments, defaults on your account or significant levels of debt, you might need to repay more of your debt and demonstrate your ability to make regular repayments before you apply.
- Submitting multiple applications too rapidly. Each application you make for a balance transfer deal is recorded in your credit history. If your application is refused, don't just apply to a different credit card issuer straight away. Instead, take some time to repay your debt and carefully compare other card options and ensure that you tick off the eligibility criteria before you apply. Follow the steps in our guide to what to do if your application has been refused to increase your chances of approval with the next application.
- Transferring to the wrong bank. If you try and get a balance transfer deal from a bank with the same owner as your current card, you'll be immediately refused. You can't transfer your debt from a Bank of Melbourne or BankSA card to a St.George card, for instance, as they're all owned by the Westpac group. Check out our full list of which banks you can transfer between before you apply.
- Cards in a different name. Your new balance transfer card must be in the same name as your current card. If you apply with a different name, such as your partner's name, you'll be turned down. If you need a card with multiple account holders, follow the steps in our guide to getting joint accounts.
To maximise your chances, follow our step-by-step guide to successfully applying for a balance transfer.
Mistakes to avoid with balance transfers
Used intelligently, a 0% balance transfer card will reduce your interest payments and get you out of credit card debt faster. Used the wrong way, your debts can actually become larger. Ensure you don't get trapped in balance transfer debt by avoiding these mistakes.
MISTAKE: Forgetting you still have to make payments
Even if you have a promotional period with interest at 0% p.a., you still have to make at least the minimum payment each month. You can't simply balance transfer and then stop making payments on your debt. The minimum repayment is usually stated as "3% of outstanding balance or $20, whichever is greater".
MISTAKE: Not checking the revert rate
Once your balance transfer promotion finishes, you'll be paying the revert rate on any remaining balance. When you compare credit cards with balance transfer promotions, aim to choose a card with a revert rate that's lower than your current credit card rate. Alternatively, make sure you repay the entire debt before the revert rate applies.
MISTAKE: Not making more than the minimum repayment
If you're only paying the minimum repayment each month, you won't be able to repay the entire balance by the time the 0% balance transfer offer ends. Then your debt will start to collect interest and it will grow again. Instead, you should calculate exactly how much you need to pay each month to repay the entire balance by the time the interest-free period ends. You can do this by dividing the size of your debt by the number of months in the balance transfer offer. This will give you a goal repayment to meet every statement period to clear the debt before the 0% promotion ends. So how much should you pay each month? The table below shows what percentage you should pay off each month to fully clear your debt during the interest-free balance transfer period. We've also shown how much this would be for a $10,000 debt. For this example, we're assuming no new purchases are being made with the card.
|Duration||% of total to repay each month to clear debt||What that would equal per month on a $10,000 debt|
The key lesson? Budget as much as you can towards paying off your credit card debt while the promotional rate applies. If you haven't paid everything off, it's possible to apply for another balance transfer.
MISTAKE: Putting new purchases on your card
Adding new debt will slow down your ability to repay your card. Don't buy anything new on your credit card that you can't immediately pay off in full. Banks are required to allocate repayments to whichever debt is accruing the highest interest on your account. So, if your balance accrues 0% interest and your purchase collect the standard interest rate, your repayments will go to the purchases rather than your balance transfer. Even if your card has a 0% rate on new purchases, you should concentrate on repaying your debt rather than making more purchases.
MISTAKE: Not considering all applicable fees
While you won't be charged interest with a 0% balance transfer, you may have to pay annual fees and a balance transfer fee. Make sure you consider these when choosing a balance transfer deal. Don't dismiss cards purely on the basis of fees. Use our calculator, which compares the total costs for cards, to find the right deal for you.
MISTAKE: Keeping your old card open
It's tempting to hang on to your old card "for use in emergencies". Realistically, if you've run up debt on it before, you're likely to do so again. Cancel the card and concentrate on paying off your balance. Remember to transfer any regular payments. Ask your old bank for the final payout figure so you don't have any leftover debt.
Answers to the most frequently asked questions about balance transfers
Applying for balance transfers
- Q: Can I transfer my balance to my partner/spouse? A: This is usually possible if you and your partner/spouse are already using a joint-account credit card. Read our full guide and find out which banks will allow this type of balance transfer. However, you usually can't transfer a debt that is in someone else's name to a new account that is under your name.
- Q: Which banks can I balance transfer to? A: The key rule that decides whether you can balance transfer to a bank is whether or not your existing bank belongs to the same credit provider. For example, balance transfers are not allowed between St.George, Bank of Melbourne and BankSA since Westpac is the credit provider. Find out which banks won't accept your balance transfer.
- Q: Can I apply for another balance transfer offer with the same bank after my current promotion has ended? A: No. Existing customers are ineligible to apply for 0% interest balance transfer offers with their existing bank. However, if you balance transfer to a different bank, when this balance transfer promotion has ended you will be able to transfer to the first bank again.
- Q: Can I transfer a credit card balance from overseas to an Australian account? A: No, you can only transfer balances from credit cards issued in Australia.
- Q: How long will it take for the old balance to appear in my new account? A: While you could be approved for your credit card within 60 seconds, it can take between 1-2 weeks for your old balance to appear in the new account. Please note that the 0% balance transfer offer applies as soon as your card is approved rather than when your balance is in your account.
Using balance transfers
- Q: Can I make purchases interest-free whilst repaying my balance transfer? A: Unfortunately, you can't take advantage of the standard interest-free days feature when you have an outstanding balance. However, some cards do offer promotional 0% offers on both purchases and balance transfers. You can compare credit cards with interest-free purchases and 0% balance transfers here.
- Q: How often should I make repayments and how much should they be? A: You should make repayments by the due date detailed on your bank statement each statement period. While you're only required to pay the minimum repayment, you should always aim to pay more to clear your debt faster. This is especially important when you're using a 0% balance transfer offer that will only apply for a promotional period. To avoid paying interest on your debt, you should calculate how much you need to pay each month by dividing the size of your debt by the how the length in months of your promotional period. This will give you a goal repayment to make each month to repay your balance before the promotion ends.
- Q: Can I repay my card before the balance transfer period ends? A: Yes, you can repay your balance as early as you'd like. In fact, it's wise to clear your debt as fast as possible to avoid the revert rates and any additional interest costs. Unlike a fixed schedule personal loan or home loan, there are no penalties for clearing your credit card debt ahead of time.
- Q: Which transactions do my repayments go towards first, purchases, cash advances or my balance transfer? A: Banks will allocate your repayments to the highest rate of interest first. This means that with a low interest rate balance transfer promotion, repayments will usually go towards purchases and cash advances first. As a result, it is ideal not to make other transactions when repaying a balance transfer to ensure that all of your repayments are dedicated to clearing your debt.