Cheap balance transfers for students, such as that offered by the Commonwealth Bank of Australia, are a win/win for both students and the bank. Students get to reduce or eliminate their credit card debt entirely and the bank gets the students as (hopefully long-term) customers.
Some credit cards charge up to 20% interest or more, as opposed to cheap balance transfers at rates varying from 0% to 6%, so switching is really a no-brainer for the financially-savvy student. Besides, students often qualify for special low interest rates while studying and the Commonwealth Bank of Australia doesn’t charge students an annual fee for their cards, all adding up to extra savings for the struggling student. The process is simple. You bundle all your credit card debt – whether from one or several cards – into just one debt, apply it to your Commonwealth Bank student credit card, and your interest payments drop immediately. Of course, this entails keeping just your CBA student card and cutting up all the others so you don’t get tempted down that slippery debt slope. If you put the money saved from the reduction in your interest payments into your debt repayments, you’ll find that debt is cleared even faster. There’s one major pitfall to avoid. While you’re getting the benefit of low interest rates from the cheap balance transfers for students, you cannot run up more credit card debt at the low rate. If you start splashing out with the credit card again, you’ll be charged the old, very high, interest rates. That means you’ll defeat the whole purpose of going for the cheap transfer rate in the first place because your new credit card debt will overwhelm the savings you’re making.
How Do You Get a Cheap Balance Transfer?
To qualify, you need to be
- an Australian citizen or a permanent resident
- studying full time at university or a TAFE
- 18 years old when you apply.
Some banks may ask that you open a savings account with them as well. If you’re happy that you can meet those requirements, you should be aware of a few other matters. Cheap balance transfers are not an open-ended proposition. They typically last a few months before your credit card charges go back to the old rate. So it’s important that you take advantage of the cheap balance transfers for students and concentrate on paying off the debt before contemplating running up even more credit charges.
