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What is a balance transfer?

Find out how a balance transfer credit card works and how you can use one to repay your debt faster.

A balance transfer allows you to move your existing credit card debt to a new credit card with a lower or 0% rate of interest. This usually means you can repay your debt faster and save significantly on interest costs. There are many balance transfer offers on the market and the length of the promotional period can vary from 6 to 36 months. Once the introductory period ends, any remaining balances will start to collect interest at the standard purchase or cash advance rate.

You can use this guide to find out how balance transfers work, compare the features and benefits as well as understand how to compare different offers to find the right one for you.

What is a balance transfer credit card?

You can use a balance transfer to move your credit card debt onto a new card from a different lender. If you have several debts, you can also consolidate them under one account with a balance transfer. These cards usually offer a 0% interest rate for a promotional period, which can help you save money as you pay off the debt. At the end of the introductory period you'll be charged a higher interest rate on any debt you have remaining from the transfer.

balance-transfer-process

Money expert Michelle Hutchison answers the question 'what is a balance transfer?'

Hi, I’m Michelle Hutchison, money expert at one of Australia’s biggest financial comparison websites, finder.com.au. Today I’m going to talk about balance transfer credit cards.

So what is a balance transfer? It’s essentially when you have a debt from one card, say it’s at seventeen per cent, and you move that debt over to a new card offering a balance transfer rate of say, zero per cent.

Unfortunately these low rates won’t last forever and they generally expire and revert to a much higher rate. One consideration is that you can’t generally transfer that balance to a balance transfer credit card in the same institution. For example, say you have an ANZ credit card with a debt on it, you can’t transfer that debt to another ANZ credit card but you may be able to transfer it to another bank or institution.

You can transfer a debt from credit card, store card, charge card, it’s a really good way of consolidating all your debts into one line of credit.

Balance transfers can be a great way to save loads in interest and pay off your credit card debts, and while you can apply for as many as you like, keep in mind that applying for too many in a short space of time can impact your credit file.

Key features and benefits of a balance transfer credit card

Now that you know what a balance transfer is, you can discover some of the key features and benefits of these cards below:

  • Introductory period. 0% balance transfer rates are only available for an introductory period which can last from 6 to 24 months (or sometimes longer) depending on the card. The promotional offer starts as soon as your card is activated, not as soon as you make your first repayment.
  • Revert rate. When the introductory period ends, the interest rate will revert to the standard purchase or cash advance rate. Considering the revert rate, it's best to repay your balance in full before the interest applies. Check out our guide for more information about balance transfer revert rates.
  • Balance transfer fees. When you first conduct a balance transfer, you may be required to pay a one-off balance transfer fee of 1% to 3% of the total amount you're moving to the new card.

Is a money transfer the same as a balance transfer?

No. A balance transfer is when you transfer the debt from your old card to a new one. A money transfer is sending money between two different accounts.

How much can you save on interest with a balance transfer?

You can use finder's balance transfer credit card calculator to discover how much you could save based on your current card's interest rate and the size of your debt. For example, let's say you have an outstanding balance of $5,000 that is collecting interest at 17.00% p.a. If you applied for a card with 0% for 12 months with no balance transfer fee or annual fee, you could save $850 in interest if you pay off the entire debt before the revert rate applies. That's $850 you could use to pay off your debt faster.

Compare balance transfer credit cards

Rates last updated August 18th, 2019
$
% p.a.

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Name Product Balance transfer rate Purchase rate (p.a.) Annual fee Amount Saved Product Description
HSBC Platinum Credit Card
0% p.a. for 12 months
0% for 12 months, reverts to 19.99% p.a.
$129 p.a.
0% p.a. on purchases and balance transfers with no BT fee. Plus, a yearly annual fee refund when you spend $6,000 and 2 lounge passes per year.
Westpac Low Rate Card
0% p.a. for 16 months
13.74% p.a.
$59 p.a.
A no frills, low rate card offering 0% p.a. interest on balance transfers for the first 16 months, with no balance transfer fee.
Citi Rewards Platinum Credit Card - Balance Transfer Offer
0% p.a. for 26 months with 1.5% balance transfer fee
20.99% p.a.
$0 p.a. annual fee for the first year ($199 p.a. thereafter)
Earn reward Points per $1 spent, take advantage of a 0% p.a. for 26 month balance transfer offer, plus $0 first year annual fee.
Virgin Money Low Rate Credit Card
0% p.a. for 14 months
11.99% p.a.
$49 p.a.
Get a $49 annual fee, 10% cashback on purchases made in the first 3 months (capped at $100) and a 14-month balance transfer.
Suncorp Clear Options Platinum Credit Card - Exclusive Offer
0% p.a. for 20 months
20.74% p.a.
$49 p.a. annual fee for the first year ($129 p.a. thereafter)
Finder Exclusive:
Save with a 0% balance transfer offer and a $49 first year annual fee when you apply online.
Bendigo Bank Low Rate Mastercard
0% p.a. for 18 months with 2% balance transfer fee
11.99% p.a.
$45 p.a.
Take advantage of 0% p.a. for 18 months on balance transfers, plus a low variable purchase interest rate of 11.99% p.a. on purchases.
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 75,000 bonus Velocity Points and save with a $64 first year annual fee. Plus, a long-term balance transfer offer.
St.George Vertigo Classic
0% p.a. for 16 months
13.99% p.a.
$55 p.a.
Get 0% p.a. interest for up to 16 months on balance transfers with no balance transfer fee. Plus, a low annual fee and purchase rate.
St.George Vertigo Platinum
0% p.a. for 18 months
12.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
Features a long-term 0% balance transfer offer, $49 first year annual fee and access to a 24/7 personal concierge service.
ANZ First Visa Credit Card
0% p.a. for 18 months with 2% balance transfer fee
20.24% p.a.
$30 p.a.
Get up to 18 months interest-free on balance transfers and save with a low $30 annual fee. Plus, up to 55 days interest-free on purchases.
Virgin Australia Velocity Flyer Card - Annual Fee Offer
0% p.a. for 18 months
20.74% p.a.
$50 p.a.
Save with an ongoing $50 annual fee and 0% balance transfer offer. Plus, the ability to earn up to 30,000 bonus Velocity Points in the first 3 months.
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 long-term balance transfer and $0 first year annual fee. Plus, insurance covers and Citibank Dining Program perks.
Bank of Melbourne Vertigo Platinum
0% p.a. for 18 months
12.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
Offers a 0% p.a. balance transfer rate for 18 months, a reduced annual fee for the first year and complimentary travel insurance.
BankSA Vertigo
0% p.a. for 16 months
13.99% p.a.
$55 p.a.
Enjoy a 0% p.a. interest rate for up to 16 months on balance transfers. Plus, a low annual fee and purchase interest rate.
Bank of Melbourne Vertigo Classic
0% p.a. for 16 months
13.99% p.a.
$55 p.a.
Enjoy 0% p.a. interest for up to 16 months on balance transfers. Plus, a low annual fee and competitive purchase rate.
Virgin No Annual Fee Credit Card
6.9% p.a. for 36 months
18.99% p.a.
$0 p.a.
Offers 6.9% p.a. for 36 months on balance transfers and up to 44 days interest-free on purchases, all for a $0 annual fee.
BOQ Low Rate Visa Credit Card
0% p.a. for 14 months
13.49% p.a.
$55 p.a.
A no-frills card offering 0% on balance transfers for the first 14 months with no balance transfer fee. Plus, a competitive purchase interest rate.
St.George No Annual Fee
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$0 p.a.
Receive up to 55 days interest-free on purchases, a low minimum credit limit of $500 and a long-term balance transfer offer.
Bank of Melbourne No Annual Fee Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$0 p.a.
Take advantage of 0% p.a. for 12 months on balance transfers, up to 55 days interest-free on purchases and no annual fee for the life of the card.
BOQ Platinum Visa Credit Card
0% p.a. for 12 months
20.74% p.a.
$0 p.a. annual fee for the first year ($129 p.a. thereafter)
Enjoy 1,000 bonus Q Rewards points monthly when you meet the spend requirement, a 12-month balance transfer offer and $0 first year annual fee.
BankSA No Annual Fee
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$0 p.a.
Offers a 0% p.a. for 12 months balance transfer, up to 55 days interest-free on purchases and an ongoing $0 annual fee.
HSBC Platinum Credit Card - Balance Transfer Offer
0% p.a. for 22 months
19.99% p.a.
$129 p.a.
Enjoy a balance transfer offer, yearly annual fee refund, airport lounge passes and complimentary insurance covers.

Compare up to 4 providers

How to use the balance transfer calculator to see how much money you could save

Step 1. Enter the total debt/outstanding amount you would like to transfer
Step 2. Provide the interest rate that you are paying on your existing debt (if you don't have your interest rate at the top of your head, the average is around 18-20%)
Step 3. See the 'Amount Saved' column to find out which credit cards will save you the most money. The calculator automatically factors in any balance transfer fees and annual fees associated with each card. Click on the 'Amount Saved' title to sort the cards in ascending or descending order of money saved
Step 4. Compare the credit cards available in the table provided to find the card that suits your needs. If you still want to find out more about a particular credit card, click the ‘More info’ link for a full review on the features and benefits.

finder-balance-transfer-calculator

Frequently asked questions

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6 Responses

  1. Default Gravatar
    AidinMarch 10, 2019

    Hi,
    Does balance transfer affect my credit score?
    Thanks,
    Aidin

    • Avatarfinder Customer Care
      JohnMarch 11, 2019Staff

      Hi Aidin,

      Thank you for reaching out to Finder.

      A balance transfer can be a good way to pay down debt. But, depending on several factors, balance transfers can either help your credit score or hurt it. In the long run, balance transfers can improve your credit score if the transfer makes it easier and faster to pay down your outstanding debt. Of course, you will make those payments on time – a crucial part of maintaining a good credit score. Hope this helps!

      Cheers,
      Reggie

  2. Default Gravatar
    AndrewOctober 24, 2018

    I have an ANZ rewards card. I’m looking to transfer the balance to a Virgin card (to get the Velocity points). After 3 months, I’d like to transfer any balance back to the ANZ card and continue using that. When I do that, will ANZ treat that entire balance as outstanding and charge interest on it?
    (note – I always pay the closing balance each month to avoid interest, but there’s always some balance on the card at any given time).

    Just want to know if this is a wise strategy to get some extra points quickly

    Hope this makes sense.

    Andrew

    • Avatarfinder Customer Care
      JeniOctober 25, 2018Staff

      Hi Andrew,

      Thank you for getting in touch with finder.

      Please see answers to your query below.

      1. I have an ANZ rewards card. I’m looking to transfer the balance to a Virgin card (to get the Velocity points).
      – Please note that balance transfer do not earn Rewards Points. When you use your Virgin Velocity credit card, points are earned on everyday purchases only. Cash like transactions as well as balance transfer don’t earn points.

      2. After 3 months, I’d like to transfer any balance back to the ANZ card and continue using that. When I do that, will ANZ treat that entire balance as outstanding and charge interest on it?
      – If you transfer the balance back to ANZ without any BT promotional offer, the entire balance will be charged on the card’s purchase rate or cash advance rate p.a. – whichever is the BT rate. Basically, this part is discussed if you request a balance transfer with your existing ANZ card.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

  3. Default Gravatar
    DaniMay 14, 2015

    What are some features you should look for if you want to use a credit card?

    • Avatarfinder Customer Care
      JonathanMay 14, 2015Staff

      Hi Dani, thanks for your inquiry!

      You may like to refer to this page which will provide a guide on choosing a credit card and the different features you may be looking for.

      Cheers,

      Jonathan

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