Balance Transfer Credit Card

Looking for a way to better manage your credit card debt, a credit card balance transfer with 0% Interest for a balance transfer period, maybe the answer.

A balance transfer is designed to deliver savings on interest charges by transferring the balance from your current credit card, which probably has an interest rate close to 20% p.a., to a new credit card featuring a 0% p.a. Balance Transfer promotional interest rate.

Once the credit card balance transfer has been made to a new 0% balance transfer credit card you make repayments to this new card in the knowledge that every dollar of your repayments are contributing to reducing the principle amount, as opposed to paying interest costs in addition to the principle amount, as was the case on your old credit card. While the total amount owed on your new 0% Balance Transfer Credit Card is the same, you are saving significant amounts of interest, as your debt is not incurring any interest charges.

The guide below is designed to help you understand how a credit card balance transfer works and how it can deliver significant savings in interest costs when managed carefully, It includes details of how to compare 0% balance transfer credit cards to find the best 0% balance transfer for your financial circumstances, and finally, offers some tips on how to maximize the interest rate savings from making a credit card balance transfer.

Introductory Offer: 0% p.a. for 24 months on Balance Transfers PLUS Reduced Annual Fee in the 1st year of $49 p.a. (then $149 p.a. ongoing)

  • Up to 55 interest free days on purchases 
  • Generous Points ratio - 1 point per $1 spent on eligible purchases in Australia 
  • High Points cap - Earn up to 120,000 points every year with Citi's Rewards Program
  • Low Minimum Income requirement - eligibility level of $35,000 p.a.
  • Complimentary Insurances - Purchase Cover, International Travel, Transit Accident & Extended Warranty insurances on eligible purchases.
  • Card Security - covered by Fraudshield.
  • Visa payWave - provides the convenience of tap and go quick payments on transactions up to $100.
  • Concierge Services - 24/7 Service
  • Free wine - every time you dine with the Citi Dining Program

Offer Conditions: 1.5% BT fee applies, Balance Transfer Rate reverts to the cash advance rate after 24 months. Apply by 31st January 2018

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How to Select the Best 0% Balance Transfer Credit Card

Making a credit card balance transfer is widely recognized as a very cost effective approach to repaying credit card debts, saving money on interest payments whilst allowing you to take back control of your finances. These benefits are certainly attractive though will only be enjoyed if you manage your balance transfer carefully and budget diligently to repay your transferred debt. Before you commence the process of finding the best balance transfer for your needs it is wise to fully understand what it will take to derive the aforementioned benefits from making the transfer, below we outline how you can ensure you claim the full benefit of making a balance transfer: 


1. Stop spending and start repaying

A good first step when contemplating a balance transfer credit card is to assess your current financial circumstances to understand whether you are in a position where you are able and committed to a shift in your behavior from spending to one of repaying. Without this shift in behavior you will not realize the benefits of a balance transfer as balance transfer credit cards are focused on rewarding regular repayments with low or even 0% interest rates on the balances transferred, to gain this benefit a sustained shift from regular spending to regular repaying is an absolute must.


2. If you have multiple debts consolidate these onto a Balance Transfer Card

By consolidating all your debts onto a single Balance Transfer Credit Card you are creating the opportunity to reduce your interest charges across your current debt, and so save significant dollars in interest. The majority of Balance Transfer Cards will accept transfers from store cards as well as credit cards and those offered by Citi and Virgin Money will also accept personal loan transfers and line of credit transfers. Once you have consolidated your debts to a balance transfer credit card you only need to manage a single account and focus on paying one payment each month, thus simplifying your situation and delivering greater focus on clearing the debts.


3. Balance Transfer Period

This is the period across which the promotional balance transfer rate is applied to the transferred debt on the balance transfer credit card, they tend to range from 6 through to 24 months. To maximize your interest savings it is imperative that you repay the total balance transferred prior to the expiry date of the balance transfer period. To calculate the monthly repayment you will need to make to repay the balance transfer in full by the expiry date, simply divide the outstanding balance by the number of months left on your balance transfer rate, this is then the monthly amount you will need to repay to have the debt cleared by the expiry date. So for example if your have $7,000 still to repay of your transferred balance and your balance transfer period expires in 12 months your monthly repayment to clear this debt in full by the expiry date will be $583.33


4. Balance Transfer Rate

The balance transfer rate is the interest rate that is applied to the balance transferred to the Balance Transfer credit card for the duration of the balance transfer period. This balance transfer rate, which is often as low as 0%, is only applied to the balance transfer amount, with any new purchases made on the card attracting interest charges, post any interest free periods, at the cards Purchase rate that is likely to be in the range of 15-22% p.a.

Calculate the savings you could make by switching using our balance transfer calculator


5. Making Purchases using a Balance Transfer credit card

If you choose to make a purchase using your Balance Transfer Credit Card you are potentially hindering the your efforts to clear your debts as by making a purchase you essentially increasing the amount of your total debt. If you are able to increase your monthly repayment to cover these purchases your decision to make these purchases should not impact your overall interest savings. Issues will occur if you are unable to increases your monthly repayment to cover these purchases as under laws introduced in July 2012 credit card providers must direct repayments against the debt in descending order, from transactions that attract the highest interest charge to those that attract the lowest. With a balance transfer credit card where purchases have been made the order is therefore likely to be:

  • Any Balance Transfer Fee
  • New Purchases Made on the card
  • The Balance Transferred

This order reduces the overall interest you will end up paying, though may hinder your ability to clear the total balance transferred to the card as you now have increased the debt by adding new purchases to the balance.


6. Establish how much are you looking to transfer

Banks will generally allow you to transfer up to 95% of the approved credit limit, so it is important that the amount you wish to transfer fits within the criteria of your preferred balance transfer credit card. For example if a credit card's maximum credit limit is $40,000 you'll be able to balance transfer up to $38,000 to this card if approved for the maximum limit. 


Which Balance Transfer Credit Card should you go for?

Selecting the best 0% balance transfer credit card for your circumstances can be quite daunting, as at any one time their could be at least fifty 0% Balance Transfer Credit Cards available to choose from. A good starting point when making your selection is to consider the 4 main types of Balance Transfer Credit Cards that are widely available:


1. 0% p.a. Balance Transfer for 6 months

Short term balance transfer credit cards are designed to facilitate the transfer and repayment of debts in the shortest possible time, and are popular with customers who have smaller debts to transfer who are confident that they have the resources to fully repay the debt in this 6 month period. If you are not 100% confident that you have the income and commitment to clear the transferred balance within the 6 month balance transfer period you should extend your search to include balance transfer credit cards with longer balance transfer periods and a 0% p.a. rate.


2. 0% p.a. Long Term Balance Transfer Credit Card

​When the balance you are transferring is on the higher side or your circumstances are better suited to repaying your debt over an extended period of time long balance transfer period credit cards are a good option. With Balance Transfer periods stretching up to 24 months these cards are designed to spread the cost of repaying the debt over the longest term, whilst minimizing the interest charged on this debt. The credit card providers become pretty selective about whom they offer these long balance transfer period to, as by extending the period of repayment they are also extending their risk, consequently you will generally need a good to excellent credit report to attain a long balance transfer period on your debt.


3. Instant Approval Balance Transfer Credit Card

The sooner you make a transfer to a balance transfer credit card the sooner you will begin to benefit from the savings in interest charges. These Instant Approval cards are designed to accelerate the transfer process by offering decisions on online applications within 60 seconds of you pressing the submit button on your application. Many of the short and long terms balance transfer credit cards offer these instant decisions but be aware to be successful you will need a good to excellent credit report to gain this fast acceptance.


4. No Fee 0% Balance Transfer Credit Cards

Tw types of fee are commonly charged by Balance Transfer Credit Cards, firstly the standard credit card fee that is charged annually and covers the cost of being a cardholder, and secondly a balance transfer fee. This Balance Transfer Fee is generally charged as a % of the balance you are transferring, and usually is in the 1-2% range. So on the transfer of $5,000 where the balance transfer fee is 2% you will be charged $100, with the amount of the fee generally being added to your balance. Balance Transfer Credit cards without these fees can be found, but are becoming increasingly rare.


How much can I save by making a Balance Transfer?

The savings in interest charges which can be made by making a switch to a 0% p.a. Balance Transfer Credit Card can be significant. The chart below shows the savings which can be made by transferring a balance from a credit card with a purchase rate of 20% p.a. to a 0% p.a. for 18 months Balance Transfer Credit Card. By transferring a balance of $5,000 the interest savings, after paying the balance transfer fee of 2%, are $1,400, the last example on the chart shows a saving of $2,280 when you transfer a debt of $10,000.

Interest Savings from making a Balance Transfer











Do’s and Don’ts on getting a balance transfer credit card


The Do’s

  • Select the balance Transfer Credit card that fits your ability to repay the debt in full within the balance transfer period, by carefully considering the combination of a low balance transfer rate with the length of the balance transfer period. A 0% p.a. balance transfer rate that applies for 6 months will turn out to be a more expensive option than a 2.99% p.a. balance transfer rate for 24 months, if you are more likely to repay your debt within 2 years than 6 months.
  • Consider the credit cards Revert Interest Rate in your balance transfer card comparison as this is the interest rate to which any unpaid debt will be subject to post the balance transfer period. This revert rate is generally either the ongoing purchase or cash advance rate of the card and will be significantly higher than the balance transfer rate enjoyed during the balance transfer period.
  • Make at least the monthly repayment each month without fail. By missing just a single monthly repayment you maybe penalized very heavily, in the worst cases this can see the balance transfer interest rate being replaced with your revert interest rate, or in lesser cases a late or no payment fee being added to your outstanding balance.


The Don’ts

  • Make purchase on your balance transfer credit card if you can in anyway avoid it as adding to your debt is going to make it harder for you to achieve the main goal of clearing your debts once and for all. The credit card providers are designing balance transfer cards that entice spending with low purchase rates and generous reward points, avoid these temptations to deliver the most rewarding benefit - a debt free life.
  • Discounting Balance Transfer Credit Cards that include an annual fee from your comparison maybe be short sighted as many of the balance transfer cards which include an annual fee offer more favorable terms, which more than compensate for the amount paid as an annual card fee .
  • Sequentially jumping from one balance transfer credit card to the next at the end of the balance transfer periods is a tactic that is often discussed as may of avoiding paying interest on credit card debts. The danger with this approach is that it makes the assumption that you will be continually accepted for a balance transfer credit card at the close of your current card deal. While new customers are always welcome, credit card providers are increasingly rejecting applications from customers who perpetually jump from one credit card to the next as this behavior is interpreted as a sign of a high-risk debt.

​Can I make a Personal Loan Transfer to a Balance Transfer Credit Card?

Yes, a limited number of Balance Transfer Credit Cards allow Personal loan Transfers that operate in exactly the same way as credit card transfers. Currently Virgin Money and Citi balance transfer credit cards feature this facility to make a personal loan transfer.


Five rules to maximize your savings from a Balance Transfer​

1. Clear your balance transfer in full

If you repay the balance you transferred in full before the end of the balance transfer period you will maximize your interest savings. Failure to repay the balance in full will result in unpaid balance attracting interest charges at the revert interest rate, immediately the balance transfer period lapses.

If you are cannot clear the debt transferred in full prior to the end of the balance transfer period you should consider making a transfer to a new balance transfer credit card before the balance transfer period lapses on your current card. When accessing this option you should allow sufficient time to make the new transfer by commencing your application at least 6 weeks before the end of your current balance transfer period.


2. Repay AT LEAST the monthly minimum repayment (preferably more) to retain the 0% Balance Transfer rate

Failure to make the minimum repayment in any month of your balance transfer period can result in penalty fees or in some cases the withdrawal of the balance transfer rate with the cards interest rate switching to the cards revert interest rate..


3. Do not use your balance transfer card as a source of further credit

By using your balance transfer credit card to make purchases or withdraw cash you are adding to the debt on the credit card and potentially weakening your ability to attain that debt free life which is the ultimate goal. Any additional debts on your credit card must be repaid in a timely fashion to avoid incurring interest charges.

If you must spend on the credit card, an option worth consideration is a separate 0% p.a. Purchase Credit Card that will avoid any interest charges so long as you clear the minimum monthly statement amount each month and the full balance on the card by the end of the 0% Purchase Period


4. Make one Balance Transfer Credit Card application

By applying for only one balance transfer credit card you are minimizing any impact on your credit report as every credit application you make is catalogued on your credit report. Where the credit card providers see multiple credit card applications in quick succession they interpret this as a sign that the applicant is in desperate, quick need of credit and so represents a high risk applicant, leading generally to a rejected application,


5. Get your Credit Report in good shape prior to making any applications

The strength of your credit report not only determines whether your application will be accepted or rejected but also impacts the type of balance transfer deal the provider offers to you. The 3 key aspects of a deal which could be potentially impacted are:

  • Balance Transfer Period - Good to Excellent Credit applicants are generally offered the advertised balance transfer period, while lower credit scoring applicants are offered reduced transfer periods. So for example the advertised Balance Transfer Card may feature a 24 month balance transfer period, which will be offered to the high scoring applicant whilst a the lower scoring applicant maybe offered a slightly reduced period of 18 months, in an effort to reduce the card providers risk.
  • Balance Transfer Rate - In a similar vein to the balance transfer period, the 0% p.a. balance transfer rate is reserved for the high scoring applicants, with lower scoring applicants being offered discounted transfer rates, but not at the 0% p.a. level.
  • Level of the credit limit on your credit card - Lower credit scoring applicants tend to be offered lower credit limits, which impacts the value of the balance you are able to transfer to the balance transfer credit card.


How to apply for a 0% balance transfer card

Follow these steps designed to help you select and apply for a 0% balance transfer offer that fits your budget and needs.

  1. Establish the total amount of debt you owe - Consider how much debt you want to transfer, and how long you think it will take you to pay it off so that you can focus on assessing the balance transfer offers which will best meet your needs
  2. Compare 0% balance transfer offers - Review the different features and types of balance transfer offers, assessing them up based on your needs and current financial goals. Use our comparison table to appraise different offers  side by side.
  3. Apply online - Click the ‘Go to site’ button and you will be redirected to the credit card’s secure application page.
  4. Fill out the application form - You will need to provide personal details including your full name, date of birth, street address, drivers licence number and/or passport number. Keep these documents handy, and submit copies as requested by the credit card issuer.
  5. Include details of the balance transfer request - The credit card application will include a section that requests the details of any balance transfer you wish to make. This section will require you to provide details of your current credit card , the account number and the total amount of debt you want to transfer to the new card.
  6. Submit the application - Following the submission of your online application you will recieve conditional approval within a few minutes by email and full approval in the following days (after submitting any supporting documentation).

Frequently Asked Questions

Can I make a balance transfer if I am cardholder of the of the bank offering the Balance Transfer Card?

Banks and financial institutions initiate balance transfer card offers as part of their marketing campaign to attract new clients. Hence, a balance transfer is normally made from one credit card provider to another.

If a provider offers a balance transfer to an existing credit card holder, it gains nothing out of the transfer and instead, loses the interest income it was already earning from that customer. On the contrary, even if the new provider were to give you (as a new client) a promotional zero interest balance transfer rate, it would still stand to earn from your new purchases, transfer fee (if any), and/or annual card fee. 

What is a Balance Transfer Limit?

The balance transfer limit is the maximum amount that you can move to the balance transfer credit card. It is dependent on the credit limit approved by the card provider.

The most that you can transfer to new balance transfer credit card would be equal to the approved credit limit, while some banks allow cardholders to transfer only up to 90 to 95 per cent of the new credit limit. The remaining part of the limit could be used for standard purchases.

What happens to the interest rate on a balance transfer credit card at the end of the balance transfer period?

At the end of the balance transfer period, the introductory low interest rate would no longer be applicable.

Any remaining balance from the original amount transferred would be charged a new, higher rate. This can be the regular rate which is applied on standard purchases, or the cash advance rate which is usually much higher. The new interest rate is also referred to as the ‘revert’ rate.

How long does it take to receive the new credit card and when is the balance transfer process complete?

Once the application process is complete and you have been approved, your new credit card will be issued. This generally takes between 5-10 business days, but it could be as many as 21 days before you receive the card.

After you get the card, you will need to activate it so that your new issuer can begin the balance transfer process, and it could be as long as 21 business days from then before the debt is moved from your old card to the new one.

Can I transfer a personal loan to a balance transfer credit card?

Yes, certain banks allow you to transfer a personal loan debt to a new credit card. We have compared these cards in our Personal Loan Transfer guide.

Do I have to transfer the full balance from my current card to a 0% balance transfer credit card?

No, you can choose to transfer a part of the balance. Just select the amount you want to transfer during the application process making sure it is within the limits set by the card provider. It is importnat to remain aware that taking this approach will mean that you have two separate debts and sets of fees to manage.