Follow these 7 steps to improve your chances of approval when you apply for a balance transfer credit card.
A balance transfer can help you take control of your debt by allowing you to move it to a card with a 0% p.a. interest rate during the introductory period. When your application is approved, this introductory rate can help you save on interest and help you pay off the balance faster.
While applying for a balance transfer credit card isn’t a difficult process, you need to meet card's application requirements (and the credit card provider's lending criteria) to get approved. Since every declined application has a negative impact on your credit score, it's wise to prepare beforehand to increase your chances of approval. Use this guide to find out everything you need to know to increase your chances of approval when applying for a balance transfer.
Steps to help you get your balance transfer approved
1. Check your credit score
Credit defaults, late payments, court writs and bankruptcy can negatively impact your balance transfer application. Sometimes there can be mistakes in your report that also affect your applications for new credit. You can see exactly what's on your credit history by requesting your free credit report and a copy of your credit score each year. If you have a bad credit score, you can then spend some time improving it to help increase your chances of getting approved for a balance transfer application.
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2. Check your credit card balance
When you apply for a balance transfer, you'll need to provide details of how much debt you want to move onto the new card. This amount is subject to approval based on the credit limit you're approved for. While you can't tell what credit limit you'll get, knowing exactly how much you already owe can help you put as much detail as possible on the application. It could also help if you want to request a particular credit limit by allowing you to make sure it fits with the cards maximum balance transfer amount (usually somewhere between 70% to 100% of the approved credit limit).
3. Compare a range of cards
As well as helping you find a competitive balance transfer offer, looking at a few credit cards will help you choose one that fits your circumstances. Check the eligibility criteria for each card and consider the size of your debt to decide if you would be able to pay off the entire balance before the promotional offer ends. You’ll also want to consider other features such as the annual fee, balance transfer fee and other features to make sure that the cost of the card doesn’t outweigh the savings you’ll earn from your balance transfer.
Compare balance transfer credit cards
4. Confirm that the new card could support your debt
As well as the credit limit details, make sure you check what type of debts can be moved onto the balance transfer card. This is especially important for the following types of debts:
- Personal loan debt. While you can usually transfer debt from a personal Australian credit card, charge card or store card, only a small selection of credit cards allow you to balance transfer a personal loan debt.
- A joint debt or your partner's debt. Most providers won’t allow you to transfer balances from an account that's not held in your name. There are also restrictions around transferring joint-account debts. You can learn more and compare which banks allow joint cardholders and couples to conduct a balance transfer in this detailed guide.
5. Make sure you can transfer between providers
Credit card companies don’t accept balance transfers from other brands that they are financially associated with. This means you can’t balance transfer debts between banks in the same institutional group. An example of this is Citi, which issues credit cards for several smaller banks including Suncorp, IMB and Virgin Money. Make sure you check which banks you can transfer your balance to and from to avoid default rejection.
6. Check the other balance transfer requirements
Be sure to do thorough research, read the fine print and find out exactly what's required for you to get your chosen balance transfer card. For example, you usually need to request the balance transfer at the time of your application to get the introductory interest rate.
7. Provide as much detail as possible on your application
Before you apply, double-check the eligibility criteria and get all the relevant documents and details ready for the application. This includes information about the debt you want to balance transfer transfer, so you'll need to provide the account name and number, the BSB and how much debt you want to move onto the new card. Aim to be as thorough as possible with the application, and respond to requests for supporting documentation (such as recent payslips) as quickly as possible.
If you're unsure of anything before you apply for a balance transfer credit card, it's a good idea to call the credit card company and ask them directly. That way you can get the most accurate information based on your circumstances.
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