What you need to know before you apply for a second balance transfer credit card to get your debt in control.
If your current balance transfer promotion has come to an end but you haven't repaid your entire debt, you do have the option to move it to another card with 0% interest on balance transfers. While there’s technically no restriction on the number of times you can transfer your credit card balance, there are conditions you need to be aware of before doing so. For example, each application will be listed on your credit file and you can’t transfer your debt to a credit card within the same financial institution. There are also balance transfer limits you need to consider before doing a second balance transfer.
This guide covers the terms and conditions you need to be aware of so that you can get another break on your credit card interest repayments.
How to conduct 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 on the market and look at the length of the promotional 0% balance transfer offer and any fees on the card to determine whether it’ll benefit you.
- Double check the eligibility requirements by reading our balance transfer credit card review and application pages.
- Apply for a balance transfer credit card and enter your current credit card details when prompted by the online application.
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.
Jose's second balance transfer
Jose has been using his credit card for purchases and to pay important bills and now has a debt of $14,000. He applied for and was approved for a balance transfer to a new card offers 0% for six months. In the six month introductory period, he paid his debt down to $11,000.
Now that the balance transfer deal is over, the remaining $11,000 will accrue interest at 21.74% p.a. Instead of paying this high interest rate, Jose decides to apply for a new credit card. He recognises that his first balance transfer was not the best option for him and he may need more than another six months to pay down the debt. He applies for a new card that offers 0% for 24 months.
Jose's approved for the new card and spends the next 22 months putting $500 per month towards the debt. This allows him to repay the entire debt without feeling strapped for cash and leaving him money for his everyday expenses.
Five factors to consider before applying for a second balance transfer
- Is the bank eligible? To be eligible for a balance transfer promotion, you must transfer your debt to a credit card from a different bank. For example, if you have a Westpac card, you can transfer a balance from a Citi credit card but not another Westpac credit card.
There are also restrictions if the financial institution is part of a banking group. For example, you’re ineligible to transfer a balance from a BankSA credit card to a St.George credit card because both banks are part of the Westpac Group.
- Do you meet the credit card eligibility requirements? Credit card application requirements include Australian residency, minimum age and minimum income requirements. Generally, if you’re eligible for a credit card, you’re also eligible for a balance transfer to that card. See our guide on how to ensure your balance transfer application is successful for more tips on the information you'll need to improve your likelihood of approval.
- Is there a balance transfer limit? There is a minimum and maximum amount you can balance transfer. The minimum amount is around $500 and the maximum balance transfer amount varies and is expressed as a percentage of your credit limit. For example, you could be able balance transfer up to 80% of your approved credit limit.
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.
- How will this impact your credit rating? Every application for credit is recorded on your credit report. A healthy credit report is key to your chances of getting approved for credit in the future. Too many applications for credit 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. After all, they are typically looking for customers that will stay with them beyond the honeymoon period.
- Are there balance transfer fees? Some financial institutions charge a balance transfer fee for specific credit card offers. This fee could be 1-4% of the total amount you wish to transfer and is deducted from your remaining credit limit. 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.
Compare balance transfer credit cards
If a balance transfer promotional period is finished and you still have debt to pay off, you may want to transfer the balance again to avoid interest charges. As there are some risks with doing a second balance transfer. make sure you weigh up all of the factors above. Remember that any balance transfer card you apply for will be subject to approval and recorded on your credit file, so it'll pay to do your research first.Back to top