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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 24 months. Once the promotional offer 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.

How does a balance transfer work?

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

balance transfer

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

  • Promotional period. 0% balance transfer rates are only available for a promotional 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 promotional offer ends, the interest rate will revert to the standard purchase or cash advance rate. Considering the revert rate, it's wise 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.

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 a 17.00% p.a. interest rate. 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.

Exclusive to finder.com.au - 0% Balance Transfer Offer

NAB Low Fee Platinum Card - Exclusive Offer

0% p.a. for 25 months
on balance transfers
Exclusive to finder.com.au

Offer ends 6 May 2018

Eligibility criteria, terms and conditions, fees and charges apply

Exclusive to finder.com.au - 0% Balance Transfer Offer

The NAB Low Fee Platinum Card features a range of platinum benefits and a long-term balance transfer offer exclusive to finder.com.au.

  • 0% p.a. on balance transfers for 25 months on a new NAB Low Fee Platinum Card. BT reverts to cash advance rate thereafter.
  • No balance transfer fee when BT requested upon application.
  • Receive seven complimentary insurance covers when you make an eligible purchase. Plus, access to the 24/7 NAB Concierge Service.
  • Request an additional cardholder at no extra cost.
  • Must apply through finder.com.au to take advantage of this offer. Offer may be withdrawn at any time.
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Compare balance transfer credit cards

Rates last updated April 24th, 2018
$
% p.a.

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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
NAB Low Fee Platinum Card - Exclusive Offer
0% p.a. for 25 months
19.74% p.a.
$90 p.a.
Ends 6 May 2018.
finder Exclusive: Take advantage of 0% p.a. interest for 25 months on balance transfers with no balance transfer fee.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$129 p.a.
Offers a 0% p.a. for 22 months balance transfer and an annual fee refund each year when you spend $6,000. Plus, complimentary travel insurance.
Westpac Low Rate Card
0% p.a. for 24 months with 2% balance transfer fee
13.49% p.a.
$59 p.a.
Offers a 0% for 24 month balance transfer option, up to 55 days interest-free on purchases and a competitve 13.49% p.a. purchase interest rate.
St.George Vertigo Platinum - Online Offer
0% p.a. for 24 months
12.74% p.a.
$99 p.a.
Platinum card benefits including complimentary insurance, plus 0% p.a. for 24 months on balance transfers (with no BT fee). Ends 30 April 2018.
Virgin Money Low Rate Credit Card
0% p.a. for 14 months
11.99% p.a.
$49 p.a.
Offers a discounted annual fee, $100 cashback when you meet the spend requirement and up to 14 months on balance transfers. Ends 30 June 2018.
HSBC Low Rate Credit Card
0% p.a. for 20 months with 2% balance transfer fee
13.25% p.a.
$79 p.a.
Receive up to 20 months interest-free on balance transfers with a 2% BT fee. Also enjoy exclusive offers with the home&Away Privilege Program.
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 Velocity Points in the first 3 months and enjoy a discounted annual fee of $64 for the first year. Ends 30 June 2018.
St.George Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
$55 p.a.
Enjoy a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
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.
St.George Rainbow Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
$55 p.a.
Available until 26 September 2018, all the great low cost features of the Vertigo Visa with a rainbow design in support of the LGBT community.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
0% p.a. on balance transfers for up to 18 months. $64 in the first year ($129 p.a. thereafter), plus, bonus Velocity Points. Ends 30 June 2018.
Citi Platinum Credit Card - 100k Bonus Points
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn 100,000 reward Points, enjoy a long-term balance transfer offer, a discounted first year annual fee and complimentary travel insurance.
Bank of Melbourne Vertigo Platinum
0% p.a. for 24 months with 1% balance transfer fee
12.74% p.a.
$99 p.a.
Offers a long-term balance transfer, low ongoing purchase rate, complimentary travel insurance and access to a 24/7 personal concierge service.
Citi Rewards Platinum Credit Card
0% p.a. for 26 months with 2.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Receive a long-term BT offer, earn Citi Reward Points and receive complimentary travel insurance.
BankSA Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
$55 p.a.
Enjoy a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
American Express Velocity Escape Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$0 p.a.
Earn uncapped Velocity Points on purchases, pay $0 annual fee for life and take advantage of a 0% p.a. for 12 months balance transfer offer.
NAB Low Fee Card
0% p.a. for 18 months with 2% balance transfer fee
19.74% p.a.
$30 p.a.
Receive complimentary purchase protection insurance, a 18 month balance transfer offer and special offers from Visa Entertainment.
St.George Amplify Card
3% p.a. for 36 months
19.49% p.a.
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Take advantage of 3% p.a. interest on balance transfers for 36 months. Plus, a $0 first year annual fee and Amplify or Qantas Points per $1 spent.
Westpac 55 Day Platinum Credit Card
0% p.a. for 20 months with 2% balance transfer fee
19.84% p.a.
$0 p.a. annual fee for the first year ($90 p.a. thereafter)
Receive a 20 month balance transfer offer, up to 55 days interest-free on purchases, a platinum concierge service and a $0 first year annual fee.
Bank of Melbourne Amplify Card
3% p.a. for 36 months
19.49% p.a.
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Take advantage of a 3% p.a. for 36 months balance transfer offer, Amplify or Qantas points per $1 spent and enjoy a $0 annual fee for the first year.

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 on you, 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.

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Frequently asked questions

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Credit Card Offers

Important Information*
NAB Low Fee Platinum Card - Exclusive Offer
NAB Low Fee Platinum Card - Exclusive Offer

Interest rate

19.74

Annual fee

90
HSBC Platinum Credit Card
HSBC Platinum Credit Card

Interest rate

19.99

Annual fee

129
Virgin Money Low Rate Credit Card
Virgin Money Low Rate Credit Card

Interest rate

11.99

Annual fee

49

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2 Responses

  1. Default Gravatar
    DaniMay 14, 2015

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

    • Staff
      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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