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How to manage a new credit card after you have done a balance transfer

You've done your balance transfer, but what now? Here are some tips to help you make the most of it.

A balance transfer credit card can help you consolidate existing debt and save on interest charges by offering an introductory low or 0% p.a. interest rate. While getting a balance transfer is simple, it can be challenging to pay off your debt before the introductory period runs. So, if you've just got a new balance transfer credit card, use this guide to find out how you can manage your account and pay off your debt as quickly as possible.

Get a head start during the introductory period

Balance transfer introductory periods typically last for the first 6 to 24 months from when you get the new card. This is when you have the greatest chance of saving money on your debt, thanks to the low or 0% p.a. introductory interest rate. Some strategies you could use to make the most of this period include:

  • Pay off as much as you can each month. The more of your debt you can pay off in the introductory period, the less interest you'll be charged when the 0% p.a. interest rate reverts to a higher standard rate. Depending on the size of your debt, you could even clear it without paying any interest. If you're not sure what you can afford to pay, you can use our free budget planner to work it out.
  • Set up automatic payments. Most credit card companies allow you to set up a direct debit from an Australian bank account. This means you can "set and forget" repayments, so that they'll always be made on time and for an amount of money that you can choose and customise.
  • Make additional repayments. Remember that you can make more than one repayment a month when it's affordable. For example, if you get a bonus at work or a large tax refund, putting a bit of that money towards your debt will help you avoid high interest charges after the introductory period ends.

What will your balance transfer rate revert to?

Can I repay my credit card debt before the balance transfer period ends?

Yes, you can repay your balance as early as you'd like. In fact, it's wise to clear your debt as fast as possible to avoid the revert rates and any additional interest costs. Unlike a fixed schedule personal loan or home loan, there are no penalties for clearing your credit card debt ahead of time.

How much will you have to repay?

Don't use your balance transfer credit card for purchases

  • Remember repayment allocation rules. Credit card repayments must go towards the part of your balance that is charged the highest interest rate first. So, if you use your card for purchases, your repayments will go towards paying off that balance before your balance transfer debt.
  • Don't assume you'll get interest-free days. While many cards offer interest-free days for new purchases, this feature is usually only available when you've paid off your account balance in full by the due date on your last statement. To put it another way, if you have a balance transfer debt, forget about enjoying interest-free days on purchases.
  • Have a plan for emergencies. If an unexpected expense comes up, think carefully about how you'll pay for it. Remember to consider other options, such as savings, or factor the added cost into your card repayments. If you do end up using your balance transfer card, check out our guide on managing new purchases when you have a balance transfer.

Weigh up your options at the end of the introductory period

If you've found yourself with a remaining debt at the end of your introductory period, you might want to consider doing a second balance transfer. However, if your credit history shows that you were unable to repay your debt during the promotional period, this may mean lenders are less likely to approve your application. Applying for too many credit cards and rejected applications can have a negative impact on your credit file, so this is also something important to consider if you're looking at using a second balance transfer as a back up.

Balance transfer credit cards can be a worthwhile consolidation tool, but only when used properly. Plan your strategy, make regular repayments and follow the above simple tips to ensure you get the most out of your balance transfer.

Compare balance transfer credit card offers

Rates last updated September 25th, 2018
$
% p.a.

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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
Westpac Low Rate Card
0% p.a. for 24 months with 1% balance transfer fee
13.49% p.a.
$0 p.a. annual fee for the first year ($59 p.a. thereafter)
Offers a 0% for 24 month balance transfer option, first year annual fee waiver and a competitive purchase rate.
ANZ Low Rate
0% p.a. for 15 months
12.49% p.a.
$58 p.a.
Save with a 0% p.a. introductory rate on balance transfers for 15 months with no BT fee. Plus a low 12.49% p.a. interest rate on purchases.
Citi Clear Platinum Credit Card
0% p.a. for 14 months
12.99% p.a.
$0 p.a. annual fee for the first year ($99 p.a. thereafter)
Offers a 0% p.a. for 14 months balance transfer and $0 first year annual fee. Plus, insurance covers and Citibank Dining Program perks.
St.George Vertigo Platinum - Online Offer
0% p.a. for 25 months
12.74% p.a.
$99 p.a.
Save with 0% p.a. interest for up to 25 months on balance transfers with no BT fee. Plus, platinum perks, including overseas travel insurance.
Citi Clear Platinum - Exclusive Offer
0% p.a. for 24 months with 1.5% balance transfer fee
14.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
finder Exclusive: Ends 30 September 2018 Receive 0% p.a. for 24 months on balance transfers and a discounted annual fee in the first year. Plus, access to Citi World Privileges.
Suncorp Clear Options Platinum Credit Card - Exclusive Offer
0% p.a. for 18 months
20.74% p.a.
$99 p.a. annual fee for the first year ($129 p.a. thereafter)
finder Exclusive: Ends 30 September 2018 Receive a long 18-month, 0% p.a., no fee balance transfer and earn Suncorp Rewards Points or Qantas Points per $1 spent.
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 points in the first 3 months with a $64 first year annual fee. Plus, the chance to win 1 million Velocity Points.
NAB Low Fee Platinum Card
0% p.a. for 24 months with 2% balance transfer fee
19.74% p.a.
$90 p.a.
Offers 7 complimentary insurance covers, a 0% p.a. for 24 month balance transfer and access to a 24/7 concierge service for a $90 p.a. annual fee.
Virgin Money Low Rate Credit Card
0% p.a. for 14 months
11.99% p.a.
$49 p.a.
Offers a $49 annual fee, 10% cashback on purchases made in the first 3 months (capped at $100) and 0% p.a. for 14 months on balance transfers.
Citi Simplicity Card
0% p.a. for 15 months with 1.5% balance transfer fee
19.99% p.a.
$0 p.a.
Save with 5% cashback on eligible purchases (capped at $50 per month) for the first 90 days from approval. Plus, a 15 month balance transfer offer.

Compare up to 4 providers

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Amy Bradney-George

Amy is a senior writer at finder.com.au with more than 10 years experience covering credit cards, personal finance and various lifestyle topics. When she’s not sharing her knowledge on money matters, Amy spends her time as an actress.

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Credit Card Offers

Important Information*
Citi Clear Platinum Credit Card

Interest rate

12.99

Annual fee

0*

*$99 p.a. after first year

Westpac Altitude Platinum Card - Qantas

Interest rate

20.24

Annual fee

50*

*$200 p.a. after first year

ANZ Low Rate

Interest rate

12.49

Annual fee

58

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2 Responses

  1. Default Gravatar
    AidanSeptember 1, 2016

    Hi Finder,

    I’m looking at switching cards from the Commbank Platinum to AMEX Qantas Ultimate card to maximise our frequent flyer points on spend. The Qantas Ultimate has an 0% 12mths interest free balance transfer rate. I plan on using the new card for everyday expenses as to maximise points earnt. Can I do a balance transfer from Commbank to the new Qantas card and still place new purchases on the new card? Will this breach the 12 month interest free rate? Or will the balance transfer still incur no interest as long as I pay the new purchases balances off in it’s entirety every month plus the minimum repayment for the balance transfer?

    Thanks in advance
    Cheers
    Aidan

    • finder Customer Care
      MaySeptember 2, 2016Staff

      Hi Aidan,

      Thanks for your questions.

      Please find my answers below:

      1. Can I do a balance transfer from Commbank to the new Qantas card and still place new purchases on the new card?
      Yes, you can apply for the AMEX Qantas Ultimate Card and request for a balance transfer from CBA so long that you meet the eligibility criteria of the card. While on BT, you can still make purchases using this card.

      2. Will this breach the 12-month interest-free rate?
      No, the promo on 0% interest on balance transfer will not be affected when you make new purchases on the card.

      3. Or will the balance transfer still incur no interest as long as I pay the new purchases balances off in its entirety every month plus the minimum repayment for the balance transfer?
      Yes, the BT will still be at 0% interest for 12 months. Since AMEX Qantas Ultimate Card charges 20.74% p.a. on purchases, it’s best to pay your balance in full (plus BT repayments) every payment due date to avoid this interest.

      Cheers,
      May

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