Is it possible to get a second balance transfer?
Can you get a 0% interest rate for longer if you move your debt from one balance transfer card to another?
Technically, there is no limit to the number of times you can transfer a balance between credit cards. But there are some important factors to consider before you apply, including how it could impact on your credit score and whether you'll be approved for the credit limit that you need on a new balance transfer card.
So, if you're still paying off debt on a balance transfer card when the introductory period ends, here's a look at the key details to consider before you apply for a new credit card with an introductory 0% balance transfer period.
What to think about before applying for a second balance transfer
- Can you transfer your balance between the old and new credit card providers? Most credit card providers only accept balance transfers from other Australian financial institutions – and sometimes the same provider will issue cards for several brands. For example, Citigroup issues credit cards for brands including Citi, Virgin Money and Suncorp. This means you could not transfer a debt from, say, a Citi card to a Virgin Money card. Check out our full guide for details on which banks and brands you can balance transfer between.
- Do you meet the eligibility requirements? Credit card application requirements include Australian residency, minimum age and minimum income requirements. If you're eligible for a credit card, you're also eligible to apply for a balance transfer to that card. See our guide on how to improve your chances of a successful balance transfer application for more details on exactly what's required for the balance transfer part of your credit card application.
- Is there a balance transfer limit? Most cards have a minimum and maximum amount you can balance transfer. The minimum amount is usually around $250 to $500. The maximum balance transfer amount varies and is usually shown as a percentage of your credit limit. For example, some cards allow you to transfer up to 80% of your approved credit limit, while others may allow you to transfer up to 100%.
Balance transfer limits are important when you're looking at a second balance transfer. If you accepted the maximum credit limit available when you applied for your first credit card and your financial situation hasn't changed, the credit limit on your second credit card could be lower than the first. If that's the case, you won't be able to transfer the full amount and will need to continue to pay off the remaining amount left on your old card.
- How will the application affect your credit score? Every application for credit is recorded on your credit report. A healthy credit report can help improve your chances of getting approved for credit. But a lot of applications in a short space of time is a red flag to potential lenders.
What's more is that applying for multiple balance transfer offers – sometimes known as "credit card churning" – is frowned upon by most issuers.
- Is there a balance transfer fee? Some credit card providers charge a balance transfer fee as part of their introductory offers. This fee is usually around 1–3% of the total amount transferred to the new card and is deducted from your new credit limit.
- What about other fees? It's also important to consider other fees such as the annual fee and interest rates. If these costs outweigh the savings you'll earn from your paying off your debt without interest, you might want to look for a card with lower costs.
How to get a second balance transfer
If you have an active balance transfer promotion that is about to finish, you can transfer the balance again to another credit card before the revert interest rate kicks in. Follow these steps to transfer your credit card debt to a second balance transfer credit card.
- Make sure you've paid off as much as you can before the end of the introductory period.
- Compare balance transfer credit cards to find one that fits with your budget and goals.
- Apply for a balance transfer credit card and enter your current credit card details in the balance transfer section of the application.
- If you're approved, review the offer and account details to make sure they are suitable (particularly the credit limit and balance transfer details).
- Activate the card and continue making any required payments on your existing account until the balance transfer has been processed.
Keep in mind that your second balance transfer will be subject to the credit card provider's lending criteria. This includes a credit check that will show your previous applications and current credit accounts (so they will be able to see when you applied for your first balance transfer card). If your application does not meet a lender's specific requirements, you won't be approved.
What other options do I have?
While applying for another balance transfer credit card would give you the chance to avoid interest charges as you continue to pay off your debt, there are other options you can consider when your 0% balance transfer rate is about to end. This includes:
- Continue with your existing repayments. If you only have a small amount of debt remaining, sticking with your current plan will help you pay off the entire balance – even if you are charged some interest on the balance.
As an example, say someone made repayments of $250 per month and had $1,000 owing on their card. If their balance transfer rate reverted to a cash advance rate of 21.99% and they continued with these repayments, it would take just over months to clear the debt and cost around $47.50 in interest. You can use a credit card repayment calculator to work out whether this option would be affordable for you.
- Make a lump sum repayment to clear the debt. If you've only been paying the minimum each month or still have a large balance but don't want to apply for a new card, you could see if there is a way to use other money or assets to pay off your card.
This could mean dipping into your savings, using a bonus from work or your tax refund so you can get rid of the debt in one go.
- Consider an instalment plan. Some credit card providers – including CommBank and Westpac – give you the option of paying off your balance in scheduled instalments. As well as giving you a clear timeline of how long you'll be paying off the remaining balance, you could be eligible for a reduced interest rate. Contact your credit card provider to find out if this is possible and what terms and conditions would apply.
- Look at other debt consolidation options. While balance transfer credit cards can offer some relief from interest charges, the introductory periods will eventually end. So if paying off your debt is a long-term goal, you may want to compare other debt consolidation options, such as personal loans.
The bottom line here is that, while it is possible to apply for another balance transfer credit card when your introductory period is ending, it will still be subject to approval. There could also be additional costs and a potential drop in your credit score, so make sure you weigh up all your options before deciding whether or not this will work for you.
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