What is a cheque-to-self?

This option gives you an introductory low or 0% balance transfer rate for any debt or expense you can’t move to a new credit card.

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With fewer limitations around how you use the funds, a cheque-to-self can help you deal with whatever costs are weighing on your mind. This option is similar to a conventional balance transfer but, instead of transferring a balance from one account to another, you request a cheque that you can deposit and use it to pay off anything. The cheque amount you’re issued then becomes the balance on your new credit card and is treated as a balance transfer – meaning you still get the benefit of a low or 0% interest rate during the introductory period.

Currently, Citi is the only issuer in Australia that offers a cheque-to-self option on its balance transfer credit cards. Use this guide to learn more about cheque-to-self balance transfers, including when you might use them and the potential features and fees, so that you can decide if this option will work for you.

What debts can I transfer to a Citi credit card?

Conventional balance transfers are usually fast and convenient. So before looking at the cheque-to-self option, keep in mind that Citi offers balance transfers for the following types of accounts when they are held with another Australian financial institution:

  • Credit cards
  • Store cards
  • Personal loans
  • Lines of credit

If your debt falls into one of these categories, you could request a balance transfer to a Citi credit card by simply providing your debt and account details on the application.

Compare Citi credit card balance transfer offers

Rates last updated September 21st, 2019
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Name Product Balance transfer rate Purchase rate (p.a.) Annual fee Amount Saved Product Description
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. Ends 30 September 2019.
Citi Simplicity Card
0% p.a. for 6 months
19.99% p.a.
$0 p.a.
Get 0% p.a. interest for up to 6 months on balance transfers with no balance transfer fee. Plus, a $0 annual fee for life.
Citi Rewards Platinum Credit Card
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)
80k bonus Citi reward Points when you spend $3,000 in 90 days and 40k the second year, up to 120,000 total. 120k Points = 48k Velocity Points.
Citi Rewards Classic Credit Card
0% p.a. for 15 months with 1.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
Earn Points per $1 spent and up to $50 cashback when you meet the spend criteria. Plus, a 15 per month balance transfer offer.
Citi Rewards Signature Credit Card
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
$199 p.a. annual fee for the first year ($395 p.a. thereafter)
Offers 120,000 bonus reward Points, a $199 first year annual fee, airport lounge passes and premium perks.
Citi Signature Qantas Credit Card
0% p.a. for 15 months
20.99% p.a.
$49 p.a. annual fee for the first year ($444 p.a. thereafter)
Get up to 150,000 bonus Qantas Points when you meet the spend requirement, a first year annual fee discount and complimentary travel perks.
Emirates Citi World Mastercard
0% p.a. for 9 months
20.99% p.a.
$149 p.a. annual fee for the first year ($299 p.a. thereafter)
Receive up to 60,000 bonus Skywards Miles and pay half the annual fee for the first year.

Compare up to 4 providers

Why would I get a cheque-to-self instead of a balance transfer?

A cheque-to-self offers more flexibility than a regular balance transfer, so there are many scenarios when people might consider this option. These include:

  • To pay off other types of debt. Some debts don’t fall into one of the eligible balance transfer categories. For example, a balance with Afterpay or another interest-free shopping service won’t be eligible unless it’s classified as a line of credit (and many aren’t).
  • For medical bills. If you need to pay for surgery or other health costs upfront, requesting a cheque-to-self balance transfer gives you a way to get the funds and save on interest charges for a set period of time. This could make it more affordable than using a regular credit card.
  • To pay for a mix of expenses. A cheque-to-self gives you the option of splitting the value of the cheque across a range of expenses. For example, you could use some of the money to pay for gifts during the holiday season, some for a holiday and some for rates and fees on your home.

Some people also apply for a cheque-to-self and then deposit the money into a savings account or offset account. This strategy is designed to “earn” you money on the value of the cheque. However, it’s important to remember that the value of the cheque is still technically borrowed money – and could end up costing you a lot if you don’t pay it off by the end of your balance transfer card’s introductory period.

What are the risks of getting a cheque-to-self?

As with any balance transfer or debt product, there are a number of potential pitfalls you could deal with, including:

  • Not paying off the balance before the introductory period ends. When the low or 0% balance transfer period is over, any debt remaining from your cheque-to-self balance transfer will be charged interest at the cash advance rate on your Citi credit card. This interest rate is typically above 19% p.a., which could quickly lead to more debt.
  • Getting more money than you need. The higher the value of your cheque, the bigger your credit card balance will be. This means your minimum monthly repayments will be high and increases the risk of not paying it all off by the end of the introductory period.
  • Reducing your credit score. Every time you apply for a form of credit, a listing is added to your credit history. This can lower your credit score – especially if you have made several applications in a short amount of time. Your credit score is also affected by how much debt you’re carrying, so the balance from your cheque-to-self could work against you until you pay it off.

How a balance transfer can affect your credit score

Fees and features to consider before getting a cheque-to-self balance transfer

Keep these details in mind to help you decide if a cheque-to-self with Citi will work for you.

  • Balance transfer fee. If the Citi credit card you apply for includes a balance transfer fee, this will be charged based on the value of your cheque-to-self. This cost typically adds 1-2.5% more to your balance, although it does vary based on the Citi card and offer you choose. So make sure you consider this fee before you apply.
  • Annual fee. Most Citi credit cards have an annual fee, which is charged when you first open the account and then each year on the anniversary of that date. This fee will add to your balance, so make sure you factor it in to your repayments.
  • Cheque-to-self limit. You can request a cheque worth up to 80% of your available credit limit. Note that you won’t know what your credit limit is until your credit card application is approved.
  • No interest-free days on purchases. Any new purchases you make when you’re paying off the cheque-to-self balance will be charged interest from the time they are made. This is because Citi only offers interest-free days if you pay your balance in full by the due date on each statement.
  • Processing time. Once your cheque-to-self request is approved, allow up to 10 working days to receive the cheque.
  • Minimum repayments. You’ll need to pay the minimum amount listed on your statement by the due date, even if you have a 0% p.a. introductory interest rate. This is usually a percentage of your balance, so keep than in mind when you’re requesting a value for your cheque-to-self.

How to apply for a cheque-to-self

Unlike regular balance transfer requests, Citi processes the cheque-to-self option manually after you have been approved for the credit card. Here’s a rundown of the steps you’ll take to go ahead with this option:

  1. Compare Citi’s credit card balance transfer offers.
  2. Apply for the card you want.
  3. Call Citi once your card is approved and request a cheque-to-self balance transfer. Remember you can apply for an amount worth up to 80% of your approved credit limit (or less).
  4. Confirm the balance transfer rates and fees that will apply, as well as the length of the introductory period.
  5. Follow the usual steps to activate your card, and then deposit the cheque once you get it in the mail.

Once you’ve paid for your debts or expenses, focus on clearing the balance on your Citi card so you can avoid interest charges. You can also use this calculator to work out how much you need to pay each month so that you can make the most of the introductory period.
Images: Shutterstock

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Credit Cards Comparison

Rates last updated September 21st, 2019
Name Product Purchase rate (p.a.) Balance transfer rate Annual fee Product Description
Citi Clear Platinum Credit Card
12.99% p.a.
0% p.a. for 14 months
$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. Ends 30 September 2019.
Virgin Australia Velocity Flyer Card - Annual Fee Offer
20.74% p.a.
0% p.a. for 18 months
$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.
NAB Qantas Rewards Signature Card
19.99% p.a.
0% p.a. for 6 months with 2% balance transfer fee
$295 p.a. annual fee for the first year ($395 p.a. thereafter)
Collect up to 120,000 bonus Qantas Points. Get 90,000 when you spend $3,000 on eligible purchases in the first 60 days and 30,000 after 12 months.
Latitude Low Rate Mastercard
11.99% p.a.
$69 p.a.
Offers a competitively low interest rate and annual fee, plus up to 55 interest-free days on purchases.

Compare up to 4 providers

* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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