When you're struggling to repay a high-interest credit card debt, you can switch to a new card with a balance transfer offer and get a low or no interest period to pay it off.
Credit cards with balance transfer offers let you pay off your outstanding balance with a low or 0% interest rate offer.
This gives you breathing room while you repay the debt without punishingly high credit card interest charged on top.
You often have to pay a fee for doing this, and if you don't repay your debt within the balance transfer period you'll end up being charged a high interest rate again.
What is a balance transfer credit card?
A balance transfer credit card offer is a way for people who are struggling with credit card debt to get a second chance at paying it off.
You can take your current balance and move it to a new credit card with a balance transfer offer. These offers are special promotional interest rates that can be as low as 0% for up to 28 months.
You can use this time to repay your outstanding balance without getting charged high interest rates.
How balance transfers work in 6 steps
Compare cards. You compare balance transfer credit card offers and find a card that offers 0% for 24 months, with a 2% balance transfer fee.
Apply. You apply for the credit card, like any normal credit card. But you also tick a box that says "balance transfer" when applying.
Approval. The card provider examines your application, looks at your spending and income, checks your credit score and considers the size of your balance. If successful, you get the new card approved.
Transfer the balance. Then you move the unpaid balance to the new card (your new card provider helps you process this, usually via BPAY).
Cancel the old card. This is the point where most people cancel the old card. If you keep spending on it, your balance will never go down and you'll be stuck.
Pay that balance off. Lastly, you focus on repaying your card balance on the new card. As there's no interest charges, this should be cheaper than it was before.
Example: Paying off a $3,000 debt via a balance transfer
You have an outstanding balance of $3,000 on a credit card with a purchase rate of 19.0%. You're trying to pay it off in 2 years.
Using a credit card repayment calculator, you'd have to pay $151 a month to reach this goal. You'd end up paying $629 in interest.
Instead, you apply for a new card with a 0% balance transfer offer for 24 months, with a 2% balance transfer fee. The fee works out to $60.
Your application is approved. You move the balance onto the new card. You decide to keep paying $150 a month off the card balance. But now you pay no interest, so you repay the debt faster.
You pay the balance off in 20 months rather than 24 months, and you pay no interest. Minus the $60 balance transfer fee, you've saved $569.
How do I find a credit card with a balance transfer offer?
Balance transfers are not a category of credit card in the same way that low rate cards or frequent flyer cards are.
Instead, they're an optional promotional offer attached to many different credit cards. You apply for the credit card and indicate on the application that you want to do a balance transfer as well.
Credit cards that come with balance transfers
Low rate cards.Cards with low interest rates often have very competitive balance transfer offers, with 0% for 24 months or more, and low annual fees. These credit cards are a good debt-busting option because they don't give you points or many extra benefits that encourage you to spend more on the card. This makes it easier to focus on repaying your balance.
Rewards cards. Plenty of credit cards let you earn rewards points on your spending plus a balance transfer offer. The annual fee will be higher than on a low rate card, and you should also think about whether you want a card that rewards you for spending when your main priority is likely repaying your outstanding balance. Some of these cards offer cashbacks on spending too, which is a nice reward but another perk that encourages spending.
Frequent flyer cards. It's possible to get a credit card that lets you earn Qantas or Velocity Points on your spending even while you pay off a balance transfer. As with rewards cards, frequent flyer credit cards have higher fees and may encourage you to focus on spending rather than paying off your balance transfer.
Use the Finder Score to find a better balance transfer offer
Every month Finder examines all the credit cards with balance transfer offers in our database and gives them a simple score out of 10. We call this the Finder Score.
Scores are based on how long the balance transfer period is (the longer the better), how low the balance transfer rate is (0% is best), the balance transfer fee and other card features.
The higher the score, the better the credit card.
Many Australians struggle to make balance transfers work
An ASIC report from 2024 found that many Australians turn to balance transfers to help with credit card debt. But the amount of people who successfully repay their balances during the balance transfer period varies from 7.7% to 67.3%, depending on the financial institution. ASIC also found that card customers who made consistent repayments were much more likely to reduce their debt.
What are the pros and cons of doing a balance transfer?
Pros
You save on interest charges. Going from a credit card with a high interest rate to one with a 0% offer is a great way to save money. Especially on larger balances.
You get space to pay your debt off. When interest charges pile up a debt can just grow and grow. A 0% balance transfer offer gives you serious breathing room to take stock of your debt and pay it off without the interest piling up.
You can combine multiple debts. You can combine two or more credit cards in one balance transfer. This makes it easier to manage a single debt but it also cuts down the number of annual card fees you're paying. Some cards even let you consolidate a personal loan debt onto the credit card.
Cons
There are fees to pay. You'll have to pay a balance transfer fee of 1–3% of your transferred balance, plus the new card's annual fee.
Your credit score could be affected. Applying for a new credit card will temporarily lower your credit score.
Your application could be rejected. If you're already in a bit of credit card debt and are struggling to pay it off, you may not be in the best position to get another credit card approved.
There are high rates if you don't pay the balance off on time. 0% interest for 2 years is a great deal. But once that offer ends any unpaid debt gets charged interest at a very high rate (often 20% or higher).
Frequently asked questions
Applying for any credit card or loan temporarily reduces your credit score. But if you get approved and keep making monthly repayments on your balance, this will help your score in the long run.
The main fee you get charged is the balance transfer fee. This is between 1% and 3% of your balance. But most cards also have an annual fee you should factor in as well.
Yes you can. But remember that you won't get a 0% rate on new spending.
And if you spend more on the card you'll have to pay this spending off plus the balance transfer.
If you have an existing unpaid card balance (or multiple card balances), with a high interest rate, switching to a new card with no interest charges will probably make paying it off much easier.
But ultimately getting a new credit card is only a good idea if you have a decent credit score and enough income to afford the card (and the repayments). And it's up to you to make sure you pay the card off before the balance transfer period ends.
Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio
Richard's expertise
Richard has written 629 Finder guides across topics including:
Balance transfers are not allowed between certain credit card brands. Read on for a list of lenders that do and don’t allow a balance transfers between them.
Use this guide to see which providers accept balance transfers from a personal loan to a credit card and discover how you can repay your debt faster with 0% balance transfer offers.
Learn about the concept of making money from credit cards with stoozing and the downfalls you should look out for.
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