Balance transfer credit cards can be an invaluable tool for cardholders hoping to work off their existing card debt. But just how long does it actually take to transfer your existing balance over to your new credit card?
The application process for a balance transfer credit card may only take you a few moments gathering paperwork and minutes applying online, but actually transferring your balance may take days, sometimes weeks – depending on the provider.
How balance transfer credit cards work
Balance transfer credit cards allow cardholders to transfer over their existing debt on to a new card, typically with a zero per cent or low interest rate for a set period of time.
If you can budget and pay off your debt in that set period of time, you’ll not only save big on interest but pull yourself out of a debt cycle. However, if you’re unable to pay off your balance in time or continue to use the new credit card as normal, you’ll begin to accrue interest on new purchases or your existing debt.
Once you apply and are approved for a balance transfer credit card, you’ll notify your existing provider and start the process of closing that account and having your balance transferred to the new provider. Your new provider may send payment directly to the old card provider, so you can begin working off your debt with low or no interest hanging overhead.
How long does a balance transfer take?
Generally, a balance transfer will take between a few days and a couple of weeks. Instant balance transferral – particularly from major providers and the big four banks in Australia – is still a ways away. But some providers, such as HSBC, are able to process transfers in ‘real time’.
Your new credit card provider will typically provide you with information upfront on just how long you may be waiting for your balance to transfer.
Some of the biggest banks and card providers in Australia have the following transfer time windows:
|Credit card providers||Estimate time to transfer balance|
|ANZ||3-15 business days|
|CBA||Minimum 4 working days|
|Westpac||Minimum 10 business days|
|American Express||Up to 10 business days|
|Citi||Up to 10 business days|
|HSBC||Processed in real time once applications are received|
|Macquarie Bank||Up to 5 business days|
|St. George/BankSA/Bank of Melbourne||Up to 14 days|
What other options do I have to pay off a debt?
If you’re looking to get some breathing room and pay down a debt - particularly if you have multiple sources - here are some other options you may want to consider as well:
- Debt consolidation loan
If you have more than one source of debt, then chances are you are paying multiple interest repayments with differing repayment dates and amounts. As the name suggests, a debt consolidation loan is a personal loan that consolidates all your debts into one, more manageable debt. Personal loans typically come with lower interest rates than credit cards too, so you’re likely to be reducing your overall interest costs.
- Offset account
An offset account is a linked transaction or savings account connected to your home loan. Any money you deposit into this account will ‘offset’ the balance of your mortgage. Meaning, if you have a $400,000 mortgage, and $50,000 saved in your offset, your home loan repayments will be for the equivalent of a $350,000 mortgage. You may be able to transfer your savings towards your outstanding credit card repayment. As it is an electronic transfer, your funds could arrive faster than some of the aforementioned transfer times.
- Redraw facility
If you have a redraw facility attached to your home loan, you may be able to withdraw any extra repayments you’ve made over the years and put this towards your debt. Not only will this help you chip away at your outstanding balance faster than making minimum repayments, but you won’t need to take out additional financing to do so. It is different from an offset account, in that accessing these funds is slightly harder. There may be a cap on how much you can withdraw, or you may be able to access the full redraw facility balance, minus one months’ mortgage repayment.
- Keep in mind that the funds you put into your redraw facility or offset account can help to reduce your home loan interest repayments and withdrawing them may see your repayments increase each month. This may, in turn, put more pressure on your budget and make paying for regular expenses and utilities more challenging.
If you’re struggling with financial hardship, don’t be afraid to reach out for help from professionals, such as accountants and financial advisers. The Australian government has free financial counselling services available, along with their National Debt Helpline – 1800 007 007.