NAB launches 0% for 24 months balance transfer offer
The NAB Premium Card now boasts Australia’s longest balance transfer offer.
NAB has heated up the competition in the credit card space with the launch of a promotional 0% balance transfer offer for 24 months on the NAB Premium Card. While a few credit cards offer 18 months interest-free, this is currently the longest promotional 0% period on the Australian market. The NAB Premium Card usually only offers a 0% balance transfer offer for 15 months, so the new deal is a definite step up. This means that if you’re struggling to repay an existing debt, you could transfer the debt to the NAB Premium card and pay off the balance without any additional interest costs for two years.
As long as you meet the eligibility requirements and apply online, this offer could help you save hundreds or thousands of dollars on interest costs. Once the promotional period ends, though, any remaining balances will start collecting the standard cash advance rate of 21.74% p.a. If you want to take full advantage of the offer to clear your debt, make sure you repay as much as you can each month rather than the minimum repayment. For example, if you have a $10,000 debt and allocate approximately $446 to paying it off each month, you should be able to repay the entire debt before the interest applies. It's a good idea to calculate how much you'll need to repay each month to clear the debt completely during the promotional period before you apply for the card to make sure you can afford it.
If you are interested in the 0% balance transfer for 24 months, you can transfer existing debts of at least $200 from up to two non-NAB banks. But when you move your debt across, you’ll be charged a balance transfer fee of 3%. So if you did have a $10,000 debt, the balance transfer fee would be $300. While a lot of balance transfer cards have a transfer fee of 2% to 3%, others don’t charge a balance transfer fee at all. 3% is the standard fee across all NAB balance transfer products, but you’ll want to make sure that the cost doesn’t outweigh the savings you make from the no-interest period.
So, how much could you save if you take advantage of the new balance transfer offer rather than the standard promotion with the NAB Premium Card? Let’s say that you had the $10,000 debt we've mentioned before. As we mentioned before, you would need to spend a minimum of $446 to repay the entire balance before the 24-month promotional offer ended. If you opted for a 15-month offer and could only make repayments of $446, you would only repay $6,690 of your debt before the promotional period ended. This would leave you with $3,310 in debt to repay. Keep in mind that this remaining balance would also begin to collect the standard cash advance rate of 21.74% p.a., causing your debt to swell once again.
While the NAB Premium Card does have a competitive balance transfer offer, it also has a $90 annual fee. If you intend to use the card beyond the balance transfer period, any purchases will also collect an interest rate of 19.74% p.a. However, if you pay your balance in full, you can expect up to 44 interest-free days. While you shouldn't use your card for purchases while you're repaying a debt, it's important to ensure that you understand all of the fees and features of the card before you apply.
Unsurprisingly, December usually sees credit card use skyrocket in the weeks before Christmas. In 2015, finder reported that Australian’s had an average credit card debt of $1,668 each from their holiday spending. So, NAB is likely just one of many banks that will ramp up 0% balance transfer offers just in time for the post-Christmas debt period.