While most people make an application for a credit card to get more spending power, many Australians are turning towards balance transfer credit cards to get rid of financial debt. If you have a debt that is out of control on one of your cards, a balance transfer card would be a good option to look at.
A balance transfer credit card can be placed in many different categories. There are no annual fee cards, rewards cards and low interest credit cards that offer a promotional deal on balance transfers. If you are specifically looking for a balance transfer card, you can find one that has one or more of the features listed above on it.
Balance transfer credit card basics
Transferring a balance over from one credit card to a new balance transfer card is very simple. Basically the old card is paid off with the new card and the balance is regulated by the conditions and terms of the new card. There are balance transfer deals available that offer a very low or even a 0% interest rate on the balance that has been transferred.
Transferring the balance
If you have an existing debt on a credit card that has a high interest rate it can seem like forever to get the balance paid off. As fast as you make payments towards your balance, interest is added on. It is like an uphill battle that never ends and it can be very frustrating to say the least.
If you get a balance transfer card with a 0% interest rate, all the money you put towards your payment will pay off the balance itself. You have six months to get the debt paid off in full and during this time no extra interest will be accruing on the card. This gives you a chance to get caught up on your debt, and this is a big relief to many.
Most 0% balance transfer cards only give you up to six months to pay off the balance before the standard interest rate kicks in. If you feel you need longer than that to pay off your debt you should look for a card that has a longer promotional period attached to it. These cards will have a very low interest rate, usually below 5%, for the balance transferred. This low interest rate means that most of your payment goes towards your balance and you don’t have to worry about high interest charges taking over until the introductory period has expired.
Some of the best balance transfer credit cards available include:
- The Citibank Gold credit card
- The ANZ Balance credit card
- The HSBC credit card
A balance transfer credit card can make all the difference to your personal finances. Now that you understand the basics of these cards you should apply for one if you have an existing debt on another high interest card.
