Balance Transfer Credit Cards

Compare low balance transfer credit cards to help you get out of debt quicker!

A balance transfer card can help you with credit card debt which could be hanging over your head for a number of reasons over-indulgence at the Christmas and New Year sales; emergency costs for a family member, car repairs or a vet bill; or simply a slow build up of charges to your credit card that you intended to pay off, but which have escaped your control. No matter what your reason for collecting credit card debt you may be feeling stretched by your monthly repayments, financially irresponsible about adding such debt to your credit report, and a little foolish for letting your credit cards run away with you.

Fortunately you're not alone, that is why there are so many different types of balance transfer cards and such a number of balance transfer offers available, and here we have all the information you need to know about how balance transfers of your credit card debt work, and how you can save hundreds or even thousands of dollars as you get out of debt.

Balance Transfer FAQ

What you need to know about balance transfer cards?
What is a Balance Transfer Card?
Who is Suited to a Balance Transfer?
Types of Balance Transfer Cards
How to Compare Balance Transfer Cards
Which Type of Balance Transfer Card Are You?
Balance Transfer Tricks to Avoid
How to Make the Most of Your Balance Transfer
How to Apply for a Balance Transfer Card
What Do You Do When the Debt is Paid?

Balance Transfer Credit Card Comparison

How Do Credit Card Balance Transfers Work?

It is not unusual for people to have one or more existing credit cards. It may be that there is money owed to these credit cards, where the customer is having to pay various amounts of interest, and having to worry about a couple of separate bills. When you do a balance transfer, what you are doing is clearing your old bills with your new credit card, and therefore consolidating all your old debts into one single easy to manage debt.

What you need to know about balance transfer cards:

What is a balance transfer card? Before you can choose a card to wipe out your credit card debt, you need to know what you're looking for because not all credit cards will accept balance transfers.

Who is suited to a balance transfer? Here we will ask you to examine your current credit card and your reasons for wanting to get out of debt to make sure a balance transfer card is the best route for you to take.

Types of balance transfer cards. Yes, we‚'e back to the choices available and there are three main types of balance transfer cards to choose from a 0% interest rate offer, a low interest rate card and a For Life balance transfer offer.

How to compare balance transfer cards. As well as determining which features are important to you, we'll also show you where compromising on a 0% interest rate can give you more time to pay, and a card with a higher annual fee may give you a lower interest rate.

Who is best suited to a low interest rate balance transfer card? A spotlight on the ANZ Low Rate MasterCard highlights the card's pros and cons to help you decide if a 0% p.a. for 3 months balance transfer card suits your circumstances.

Who is best suited to a low rate transfer? We'll give you an overview of the Citibank BP Card transfer offer so you can decide whether you could pay a slightly higher rate for slightly different benefits.

Who is best suited to a For Life balance transfer? Using the Citibank Platinum balance transfer offer as an example, you can weigh the pros and cons of having no expiry date on your low balance transfer interest rate.

The tricks to avoid. We‚'e a comparison site and not endorsing one card or offer over another, this means we can show you the pitfalls and fine print that the providers want you to gloss over.

How to make the most from your balance transfer. Not only can you transfer your debt to pay a lower interest rate but if you manage your transfer correctly you can pay off your debt sooner, save more in interest and avoid fees.

How to apply for a balance transfer card. Once you're convinced a balance transfer card is right for you, we'll walk you through the application process so you can start saving.

What do you do when the debt is paid? You may be focussed on finding a credit card which doesn't charge you such exorbitant interest, but what about when your balance transfer card is paid off, and you are credit-card-debt-free? We'll help you make decisions about what to do with your current credit cards, to avoid crippling credit card debt in the future.

What is a Balance Transfer Card?

A balance transfer card is essentially a credit card which is offering a special interest rate for customers who bring their debt with them. A balance transfer works by:

• Paying off your old credit card debt. A balance transfer card can pay off your debt on just one credit card or a number of credit cards and even store cards. The balance of your existing credit and store cards is now zero as the debt has been transferred to your new balance transfer card.
• Offering you a lower interest rate on your credit card debt. Where the debt is paid off from your old credit card or store card, you still have to repay that amount, however, by transferring your balance to a card with a lower interest rate you are paying less interest, and sometimes even zero interest, so you have the opportunity to repay your debt faster.
• Not necessarily offering lower monthly repayments. Even though less of your monthly repayment will now be going towards paying interest on your debt, each credit card provider calculates their minimum monthly repayments differently so you may be paying the same amount each month this simply means you'll be paying more towards the principle amount, paying down your debt sooner.

Who is Suited to a Balance Transfer?

There is such a range of balance transfer cards that there is one to suit just about every debt, need and budget, but a balance transfer card is best suited to you if:

• You want to consolidate your debts. If you have more than one credit card and want to be making just one monthly repayment to make your budgeting and cash flow easier then you might consider a balance transfer card as it can take on all of your debts and roll them into one repayment, and charge you a lower rate of interest.
• You want to pay off your debt faster. If you feel like you're not getting anywhere making repayments on your current credit card it could be because you are paying a high rate of interest on your debt, so the majority of your repayment is going to pay off interest, and very little is going to pay off your actual purchases. However, with a balance transfer card you can be paying little to no interest so you can focus more of your repayments on your actual debt.
• You want to tidy up your credit report. If you are looking at applying for a home loan or personal loan, if you reduce your credit card commitments you will be eligible to borrow more of the purchase price, and may even be able to pay less mortgage insurance. If you consolidate a number of credit cards to one balance transfer card you can make just one monthly repayment, and pay off that debt sooner making you a more attractive loan candidate.

Types of Balance Transfer Cards

There are any number of balance transfer offers, but there are three main types of balance transfer cards which you can choose from. These include:

• 0% interest rate balance transfer. This type of balance transfer will not charge you any interest on the balance your transfer to your new card. This means that everything you pay to your credit card each month goes to reducing your debt, just be aware that 0% interest balance transfer offers are usually for a very short period of time so make sure you can pay off your debt within the 0% interest rate period.
• Low interest rate balance transfers. Offer you a much lower interest rate than you are paying on a standard credit card so you can still make great savings in interest and pay off your balance sooner. A low interest rate card is also likely to give you a little longer to pay off your debt before reverting to a higher standard rate, as compared to a 0% interest rate card.
• For Life balance transfer cards.Will apply a lower interest rate to your balance until it is completely paid off. This allows you to tackle an exceptionally high credit card debt, or make some more room in your budget for other expenses as you don't have to rush to pay off your credit card. The rate on a For Life transfer will be slightly higher than the other two options, but you are paying that little bit more interest for a lot more time.

Top Credit Card Balance Transfer Deals

Bankwest - Bankwest offers a great deal on balance transfers, because it keeps your rates low and gives you a lot of time to pay off your debt. You can choose between the Bankwest Lite MasterCard that has a 10.99% p.a. purchase interest rate or the Bankwest Zero Platinum MasterCard to get high quality rewards with a slightly higher 1% p.a. for 6 months (reverts to 17.99% p.a.) interest rate and no annual fee.

Citibank - The Citibank Platinum Visa has a credit card balance transfer deal that lets you pay no interest for six months on your transfer. It is pretty hard to beat a deal that will let you pay off your debt for free, but only if six months is enough time for you to tackle your debt.

St. George - A Vertigo credit card from St.George offers a balance transfer rate of 0.99% p.a. for 12 months, it also carries the same interest rate on purchases. This makes it one of the rare exceptions to the 'don't spend on your balance transfer card' rule. If you need a card for both purchases and balance transfers you should give St.George a close look.

How to Compare Balance Transfer Cards

When the banks advertise their balance transfer offers they are of course touting the best features of their products. However, before you choose a balance transfer card, make sure you compare all of the features of your new card, and understand all of the fine print. For example:

• Check for an annual fee. Balance transfer cards can offer annual fees as low as $0 and as high as $250; and don't just think because you are planning to pay off your balance within six months that you don't need to pay that annual fee because it is usually charged when you sign up for the card. Some balance transfer cards will also waive the fee for the first year, something you can take advantage of if you plan to pay off your debt quickly.
• Compare the low/no interest rate periods. A 0% interest rate sounds too good to be true right? Well it can be if you are unable to pay off your transferred debt within the six months usually allocated to a 0% balance transfer. Instead, compare the interest rates on balance transfer terms you can realistically meet and you'll save yourself in the long run.
• Check for transfer fees. Some balance transfer cards will charge you an additional fee to accept your balance, so compare which card offers you the lowest transfer fee before you make a decision.
• Look for the additional features you need. Compare the other features which make up a credit card offer such as the payment methods you can use to make your monthly payments, the statement frequency, the access to internet banking to check you progress you know the features you need and want to make your repayments process easier.

Balance Transfer Tricks to Avoid

The banks are still in business to make money and while they are offering you a low interest rate, they are also gambling on the fact that many of their new transfer customers won't be able to keep to the conditions of the card and will end up paying a higher interest rate anyway. To avoid being one of those customers, follow these few simple tips:

• Never spend on your balance transfer card. Purchases you make after you have transferred your balance will be charged at the higher standard rate of your balance transfer card. Plus, most credit cards operate on a negative payment hierarchy, where the oldest balances are paid first. Therefore, your purchases won't be paid off until your balance has been repaid, meaning you are earning that high purchase rate for longer.
• What to do if you did make a purchase on your balance transfer card first assess the damage, if you are close to repaying your original balance and the purchase rate of your card is low anyway, somewhere in the low teens is best, you can probably wait it out and keep making your repayments. However, if you are attracting a high purchase rate in the 20.00% range and you are not about to pay off your transferred balance, look for a new balance transfer offer and transfer your old balance and your new purchases.
• Remain aware of your low rate expiry date. Set a reminder for two months before your rate expires and assess whether you will pay your balance off in time. If you don't think you'll make it, start looking for a new balance transfer offer and start the application process to avoid paying the higher rate. While you may have already paid an annual fee, few balance transfer cards will have a cancellation fee so you can maintain a fighting chance at paying down your debt.

How to Make the Most of Your Balance Transfer

To make sure you stay on top of your debt and use your balance transfer card to get control of your debt as quickly and as easily as possible, follow this advice to choose and use your transfer to benefit you, not the banks:

• Shop around for the best transfer deal. Banks and credit card providers have sales and offer specials so make sure you compare all the balance transfer cards on offer to find one with the repayment terms to suit you, and one which offers you the lowest possible interest rate.
• Pay more than the minimum amount. Now that less of your monthly repayment is going to interest, paying more than the minimum of your new balance transfer card will pay off your debt sooner. Any additional payment you make to your credit card will come directly off of your debt, rather than going to pay interest, meaning you can be debt free sooner.
• Don't use your new card. Any purchases you make on your balance transfer card will be charged interest at the higher rate, unless you choose a card like the St George Vertigo or the Aussie MasterCard which offer a purchase rate to match their transfer rate for the same six month period. Otherwise you will be paying a higher rate of interest on your purchases and your monthly payments will not go towards those purchases until your transferred balance is repaid.
• Don't use your old card. You have transferred the balance from your old credit card because it was unmanageable so don't go racking up a new debt on the card just because it is ‚Äòpaid off' because it's not really, the debt has just been moved, not removed.

How to Apply for a Balance Transfer Card

Once you have made your comparisons and found a type of card and credit card offer which suits you and your debt, you can start the application process:

• Follow the secure Credit Card Comparison links. After using our comparison tables you can follow a secure link from your chosen card to the provider's website. You can be sure you are viewing genuine bank offers and entering your details into a secure bank website and online form.
• Complete a credit card application. A balance transfer is actually just one part of a credit card application so once you are at your chosen provider's website, begin filling in an online application form, or apply over the phone or in person if you prefer. You will be asked during the application if you have a balance to transfer and you will need to provide your current credit card account details and the amount you want to transfer.
• Upon approval your balance transfer will be made automatically. Once your application is submitted you have to wait for approval from the bank. When your new credit card has been approved, your old credit card will automatically be paid out by your new one, and you will start making your monthly repayments to a new provider.

What Do You Do When the Debt is Paid?

You've been battling with your credit card debt for so long, it's hard to imagine it ever being paid off but rest assured you will get there if you follow our steps and advice. So what do you do when you do get to a zero credit card balance, and how can you avoid the need for another balance transfer in the future?

Cut up some cards. This is where you can compare the credit cards you have and decide which ones to keep and which ones to get rid of. Look at keeping the card with the lowest annual fee, the lowest purchase rate and the most interest free days to give you the best chance of avoiding accumulating credit card debt in the future.

Look for credit card rewards. Now that you have control over your credit card balance you can also look for cards which will reward you. This may be rewards for points collected with every dollar spent, or cash back incentives or discounts on all your purchases.

Make credit card comparisons for the future. You no longer have to worry about high balances or monthly repayments and so you can compare the top credit cards available in Australia based on what you will need in the future, knowing you are more financially responsible and more credit-aware having battled the balance transfer and won!