Interest-free balance transfer can be a useful way to clear your debt, but what happens when the promotional offer ends and the revert rate kicks in?
If you're carrying a debt that's collecting high interest, a balance transfer credit card with a promotional offer can be a great way to repay your debt without the cost of interest. But like all good things, the promotional offer can't last forever and a revert rate will eventually kick in. The revert rate refers to the standard balance transfer rate, which is usually the cash advance or purchase interest rate, that you'll have to pay on your remaining balance once the introductory offer ends.
What will my balance transfer rate revert to?
Depending on your card issuer, your promotional balance transfer rate will revert to either the standard purchase rate or cash advance rate. You can see whether your bank's balance transfer will revert to the cash advance or purchase interest rate below.
|Credit card issuers||Reverts back to||Maximum balance transfer amount||Minimum Balance Transfer Amount|
|American Express||Purchase rate||$10,000 or 70% of the approved credit limit||n/a|
|ANZ||Standard balance transfer rate||of the approved credit limit||$100|
|Bank of Melbourne||Cash advance rate||80% of the available credit limit||$200|
|Bank of Queensland||Cash advance rate||80% of your credit limit||$500|
|BankSA||Cash advance rate||80% of the available credit limit on your new BankSA credit card||$200|
|Bankwest||Standard balance transfer rate||95% of the approved credit limit||$500|
|CBA||Cash advance rate||Up to your available credit limit||$500|
|Citi||Cash advance rate||You can transfer up to 80% of your approved credit limit||$500|
|Coles||Cash advance rate||80% of your approved credit limit||$2,000|
|Community First||Standard balance transfer rate||All or part of the outstanding balance and/or limit of your existing credit card||$500|
|CUA||Cash advance rate||80% of your credit limit||$500|
|HSBC||Cash advance rate||Up to available credit limit on HSBC card||$500|
|Macquarie Bank||Standard balance transfer revert rate||Subject to your available credit limit||$500|
|NAB||Cash advance rate||Maximum balance transfer of 90% of the approved credit limit. For example, if you had a $1,000 credit limit on your new card, you'd be able to transfer a maximum of $900 from another credit card.||$200|
|St.George||Cash advance rate||80% of the approved credit limit||$200|
|Suncorp||Cash advance rate||Subject to lending criteria||$500|
|Virgin||Cash advance rate||80% of the approved credit limit||$500|
|Westpac||Cash advance rate||80% of the approved credit limit||$200|
Compare 0% balance transfer credit cards by the revert rate
When will I have to pay the revert rate?
If your balance transfer credit card comes with a promotional offer, the 0% or low interest on balance transfers will only be available for a set period of time (usually between 6 to 24 months, depending on the card and offer). Once this promotional offer ends, you'll be required to pay the revert rate on any remaining balances. This will either be the standard purchase or cash advance interest rate, both of which are usually much higher than the promotional offer interest rate. The cash advance rate is generally higher than the standard rate on purchases. If you can, always try to repay your balance before the revert rate kicks in to avoid expanding your remaining debt with high interest rates.
Always make sure to check what the revert rate is and when it will kick in before applying for a balance transfer credit card. You can find this information within the Product Disclosure Statement relevant to your card. Once you've worked this out, consider how much debt you have, the length of the promotional offer and how much you'll have to pay to consolidate the entire debt before the revert rate rolls in.
Balance transfers can be an efficient debt consolidation strategy, but should always aim to repay your entire debt before the revert rate comes up to bite you.Back to top