balance transfer

The balance transfer process

Find out how to move your existing credit card debt onto a new 0% interest credit card with this comprehensive balance transfer guide.

If your credit card debt seems to be constantly accruing interest, a balance transfer might just be the solution to your financial woes. Regain control of your mounting debt with a 0% balance transfer credit card and repay your debt faster without the burden of interest for a promotional period. Use this guide to find out how balance transfers work, the steps you need to take to request one and some tips to paying off your debt before the introductory offer ends.

How to use a 0% balance transfer to manage post-Christmas debt


What is a balance transfer?

A balance transfer is the process of transferring an existing debt from one or more lenders to a new credit card, usually with a low or 0% interest rate on balance transfers. While the 0% balance transfer interest rate may only be in place for six to 18 months, you can pay off your debt faster without the cost of interest for the promotional period. If you’re unable to repay your entire balance before the offer ends, any remaining debt will start to accrue the much higher purchase or cash advance rate. So, while you’re only required to pay the minimum repayment each month, it’s wise to pay as much as you can to clear your debt before interest applies.

The advantage of getting a new credit card for this purpose lies largely in the fact that many 0% balance transfer credit card promotions offer 0% interest rates on your transferred debt for a promotional period. As such, a balance transfer can save you a fair amount of money and help you repay your debts more quickly.

Step-by-step guide to the balance transfer process

If you’re thinking of consolidating your debt by conducting a balance transfer, follow these four steps to understand how to compare your options, apply and pay down your debt with a 0% offer.

Step 1: Compare your options.

Since there are numerous 0% balance transfer offers on the market, it’s important that you research and compare them before deciding on the one that will best serve your needs. To make things easier, you can compare your options based on the following:

  • Promotional interest rate. Most balance transfer credit cards come with a 0% balance transfer interest rate, but some may come with a low but higher rate of say 6%. Generally, the lower the interest rate, the more you’ll save.
  • Length of the introductory period. Balance transfer card promotions usually offer a low or 0% interest rate for a fixed time only. This introductory period usually lasts between 6 and 24 months. Naturally, the longer the period, the greater your possible savings too.
  • Revert rate. When the promotional period ends, a revert interest rate will apply to your balance. This is usually a higher interest rate (such as the standard purchase and cash advance rate) and you should factor it into your calculations, especially in the event you are unable to repay your entire debt during the introductory period.
  • Balance transfer limit. There is a limit to the amount you can transfer, and this varies among credit cards. Usually, you can only transfer up to a percentage of your approved credit limit, such as up to 70–100%.
  • Eligible issuers and cards. Balance transfers are not usually permissible between credit cards issued by the same bank or card issuer. Check our list to learn which ones you can transfer your balance to.
  • Balance transfer fee. Sometimes you may be charged a one-time balance transfer fee for the balance transfer, up to 3% of your transferred amount. As this can be a substantial fee depending on the size of your debt, you may wish to look for a card with no balance transfer fee. Otherwise, this fee could offset your interest savings.
  • Other card features and fees. While you shouldn’t use a balance transfer card for purchases while you’re trying to pay down a debt, if you plan to use the card beyond the balance transfer offer, you should consider its typical features. These include the annual fee, purchase interest rate, cash advance interest rate, ATM fee, foreign transaction fee and other fees where applicable.

Step 2: Apply for a credit card and request a balance transfer.

Once you have chosen your new credit card, the next step is to make that application. Here’s an estimate of how long it can take to get your new credit card (usually within two weeks), but you can help quicken the process by ensuring that your application goes through smoothly. The trick is to make sure that you meet the following eligibility requirements and provide all the necessary information and documentation with your application:

Eligibility criteria

  • Age. Most cards require applicants to be at least 18 years old.
  • Income. Most cards have a stipulated minimum income requirement that begins at $15,000 yearly. Premium cards have much higher income requirements.
  • Residential status. Most cards require that applicants be Australian citizens or permanent residents, but some cards also cater for certain visa holders.
  • Credit history. All cards require that you have a good credit history and credit score.
  • Balance transfer. On top of the balance transfer limit, some cards may also impose restrictions around balance transfers, such as what type of account you can transfer a debt from, whether it is a joint balance transfer or a personal loan.

Important information and documents

  • Proof of identification. Typically, you will need to provide copies of your driver’s licence and/or passport.
  • Proof of income and employment. You may be asked for recent payslips or income statements, as well as possibly an employment contract where relevant.
  • Proof of other assets. Apart from providing all relevant financial details of your assets, liabilities and expenses, you may also need to provide proof of any assets listed.
  • Balance transfer details. The card application usually includes a section for requesting your balance transfer. Since this section is very important for your balance transfer request, be sure to provide accurate details of your current loan accounts and the amount(s) you would like transferred.

Step 3: Close your old account.

Once you’ve received your new credit card and your balance transfer has been processed, it’s time to close off your old account. Make sure that the balance has been successfully moved across by contacting your previous card provider, and then close your old account so that you don’t get hit with further maintenance or annual fees in the future. If you were unable to transfer your entire debt to the new card, you’ll need to pay off any remaining balances before you close the account. See our guide on how to cancel your credit card for tips on closing your card without hurting your credit score.

Step 4: Start paying off your debt.

Once your balance transfer is complete, you will have the length of your introductory period to pay down your balance. It is crucial that you make more than the minimum repayment each month to repay the entire debt before the revert rate applies. If necessary, seek free help for managing your debt.

Since the final goal is financial freedom, a balance transfer can give you a leg up in climbing out of debt without the burden of high interest. It will buy you some interest-free time to repay your debt, and ultimately save you money that would otherwise have been lost to interest fees. With some discipline and commitment, you too can be debt free in a matter of months.

Comparison on balance transfer credit cards

Rates last updated September 20th, 2017
% p.a.

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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
NAB Premium Card - Exclusive Offer
0% p.a. for 24 months
19.74% p.a.
$90 p.a.
Until 1 October 2017, exclusive to, enjoy a no BT fee, balance transfer offer with platinum privileges, including travel insurance.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$129 p.a.
Earn 3 bonus Velocity Points per $1 for the first 3 months, a first year annual fee refund and a yearly $129 Virgin Australia Gift Voucher.
Citi Rewards Platinum Credit Card
0% p.a. for 24 months with 1.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Offers a long-term balance transfer. Earn extra points on eligible international spend, plus complimentary travel insurance.
Westpac Low Rate Card - Online Only Balance Transfer Offer
0% p.a. for 24 months with 2% balance transfer fee
13.49% p.a.
$59 p.a.
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% balance transfer fee. Plus, use of the Westpac mobile banking app.
ANZ Platinum Credit Card - Exclusive Offer
0% p.a. for 12 months
0% p.a. for 3 months (reverts to 19.74% p.a.)
$0 p.a. annual fee for the first year ($87 p.a. thereafter)
Exclusive to finder, receive 0% p.a. interest on purchases for 3 months and 0% p.a. on balance transfers for 12 months with no balance transfer fee.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$99 p.a.
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
NAB Low Fee Card
0% p.a. for 16 months with 2% balance transfer fee
19.74% p.a.
$30 p.a.
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
HSBC Low Rate Credit Card
0% p.a. for 15 months with 2% balance transfer fee
13.25% p.a.
$55 p.a.
Receive up to 55 days interest-free on purchases. Also enjoy exclusive offers with the home&Away Privilege Program.
Virgin Money Low Rate Credit Card
0% p.a. for 12 months
11.99% p.a.
$99 p.a.
Receive up to 44 days interest-free on purchases and the optional insurance coverage of CreditShield Edge.
NAB Low Rate Platinum Card
0% p.a. for 16 months with 2% balance transfer fee
13.99% p.a.
$100 p.a.
Enjoy the protection of 7 complimentary insurances including overseas travel and purchase protection insurance.
ANZ Low Rate Platinum
0% p.a. for 16 months with 2% balance transfer fee
11.49% p.a.
$99 p.a.
Enjoy platinum benefits with exclusive discounts, complimentary travel and purchase insurances and a 24/7 personal concierge.
Woolworths Everyday Platinum Credit Card
0% p.a. for 14 months
19.99% p.a.
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Receive a $50 eGift Card when you apply by 31 December 2017 and make an eligible purchase by 31 January 2018.
American Express Essential®  Credit Card
0% p.a. for 12 months with 3% balance transfer fee
14.99% p.a.
$0 p.a.
Receive a $50 credit when you apply online, are approved and spend $750 on your new card within the first 3 months of card membership.
American Express Explorer® Credit Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$395 p.a.
Receive a $400 Travel Credit every year and up to two entries per year to the American Express Lounge at Sydney International Airport.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months on eligible spend and enjoy a discounted annual fee of $64 for the first year.

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4 Responses

  1. Default Gravatar
    RobertJune 11, 2013

    My Credit Card Balance transfer was completed by the bank. But the card of the other bank where the money was taken did not show this information yet.It has been 1 day. How long does it take for the other bank to process the Credit Card Balance Transfer?

    • Staff
      JacobJune 12, 2013Staff

      Hi Robert. Thanks for your question. Please allow up to two weeks to complete the transfer of the balance. But realistically, it should be processed in a couple of business days. If it’s been longer than this, please get in touch with the lender directly to find out what’s happening. Jacob.

  2. Default Gravatar
    April 22, 2013

    Can I do a balance transfer to cover a personal loan. Thanks.

    • Staff
      JacobApril 22, 2013Staff

      Hi Pooja. Thanks for your question. Citibank allow you to transfer the balance of a personal loan to a credit card. You can compare Citibank accounts here. Jacob.

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