Clear your debt and cut your interest costs with a 0% balance transfer credit card.
If you're overwhelmed with debt, you can use a balance transfer credit card to clear your balance without the burden of interest for a promotional period. However, some cards will offer you more savings than others depending on the size of your debt and your ability to repay. You can use the calculator built into the table below to compare current balance transfer credit card offers by the products that offer you the biggest savings.
Balance Transfer Credit Cards Comparison
How can a balance transfer help me save money?
A balance transfer credit card is designed to give you more breathing room to pay off your debt without any interest for a promotional period. Depending on the size of your debt and the interest rate you're currently paying, this could save you tens, hundreds or thousands of dollars. Below we've explained how balance transfers work and how the different features can help you save.
Promotional balance transfer rate
Most balance transfer credit cards in Australia boast a 0% interest rate for a promotional period. Compared to the standard purchase rate (which can range from 9.99% on a low rate card to around 22% on a premium card), you can take advantage of the interest-free period to clear your debt without the burden of additional costs. At the end of the promotional period, a higher revert rate will apply to any remaining debt from the transfer. To make the most of your balance transfer card, you should aim to pay your debt in full before this revert rate kicks in.
Length of introductory period
The length of the 0% balance transfer offer can usually vary from 6 to 24 months (although they can last longer). The longer the interest-free period, the more you can space out your repayments and generally the more you can save on interest costs. As a bunch of balance transfer credit cards may offer 0% for 24 months, for example, you can consider other factors including the annual fee, balance transfer fee and revert rate to compare which option is right for you.
Ideally, you should pick a balance transfer card that gives you enough time to pay off your entire balance in full before the revert interest rate applies. For example, let's say you have a debt of $5,000 and are looking at a card with 0% on balance transfers for 18 months. You'd need to allocate $278 each month to clear your debt in the first 18 months. If you don't think you can afford this each month, look for a card with a longer interest-free period to spread out and reduce your monthly repayments.
How to use the balance transfer calculator in 3 easy steps
Now that you know how a balance transfer can help you save money, you can use the table above to compare which credit cards offer you the biggest savings in 3 easy steps:
- Step 1. Enter the total debt/outstanding amount you would like to transfer
- Step 2. Provide the interest rate that you are paying on your existing debt (if you don't have your interest rate on you, the average is around 18-20%)
- Step 3. See the 'Interest Saved' column to find out which credit cards will save you the most money. Click on the 'Interest Saved' title to sort the cards in ascending or descending order of money saved
If you want to find out more about a particular credit card, click the ‘More info’ link for a full review on the features and benefits.
Example of table taken from 25 July 2018
Back to topVIDEO: Money expert Michelle Hutchison explains 'What is a Balance Transfer?'
A balance transfer credit card can be a useful debt consolidation tool when you pick the right card and pay off your balance in full. As there are many 0% balance transfer credit cards on the market, make sure to compare your options before you apply.
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Myself and my partner have had an application denied and we didn’t even get to submit any of our personal financial details so we requested that re-assessment of the application with the payment details and we can’t work out why we have been denied. All they told us is we don’t meet their requirements. We currently have a credit card that we want to transfer the balance to a period of interest free. We have only applied the once. Do you have any suggestions on how we go about getting a credit card, without getting marks against our credit rating if we were to get further denials ?
Hi Rachael, thanks for your inquiry!
It would be best to directly visit a bank branch for credit inquiries. Please see this page for recommendations on improving your chances on main credit criteria. It may also be beneficial to request a copy of your credit file, you can find out more about how to request a free copy on this page.
Cheers,
Jonathan
If you balance transfer from an existing credit card do you have to close it down or can you continue to use that card?
Thanks
nick
Hi Nick,
Thanks for your question.
You aren’t required to close your previous credit card account, whether or not you close it will be up to you.
I hope this has helped.
Thanks,
Elizabeth
People need to remember that if they take a balance transfer from a card that also has normal purchases on it and they are unpaid, the lender credits payments to the interest free amount first while the balance of purchasers continue to accrue interest.
So the benefits may not be as much as they would hope for.
Say I have a home loan and I manage to get a credit card with a high limit (let’s say $20k), draw that as cash and pay $20k off my home loan and then balance transfer this $20k to another credit card with 0% interest is this all OK, will the banks stop this from happening, what am I missing.
When the interest free balance transfer period ends I just redraw my home loan (or move money from the offset account) and pay the credit card off and close it, seems like I could save about $1000/year in interest or more if I could do it with a bigger credit card limit transfer.
I’d obviously not buy anything on the credit card with the $20k balance transfer amount on it to avoid paying interest and just get another one for normal expenses which I pay off each month
Hi Ben,
Thanks for your question.
One of our money experts, Rob Dawson answers a similar question in this article. It’s likely that the banks will identify this and may decline your credit applications.
Cheers,
Shirley
Once a transfer has taken place, how long between banks does it take to reflect the transfer. I.E. My new card now has a -$8000 yet my old card still has +$8000 outstanding.
Thanks
Hi Neil. It depends on how long it takes for your old card issuer to process the transfer. Lenders say that you should allow up to a week for the transfer to go through; however, in my experience, it was processed in a couple of days. Jacob.