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Purchase Rate

19.74%

Balance Transfer Rate

0%

for 6 months then 21.74%

No set max

2%

Annual Fee

$30

Interest Free Days

44

More details

Purchase Rate

20.74%

Balance Transfer Rate

0%

for 22 months then 20.99%

80%

of the approved credit limit

$0

Annual Fee

$64

for 12 months then $129

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

20.24%

95%

of the approved credit limit

$0

Annual Fee

$295

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

20.24%

95%

of the approved credit limit

$0

Annual Fee

$95

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

20.24%

95%

of the approved credit limit

$0

Annual Fee

$375

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

0%

for 18 months then 20.24%

95%

of the approved credit limit

2%

Annual Fee

$30

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

20.24%

95%

of the approved credit limit

2%

Annual Fee

$0

for 12 months then $30

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

20.24%

95%

of the approved credit limit

$0

Annual Fee

$425

Interest Free Days

55

More details

Purchase Rate

20.24%

Balance Transfer Rate

20.24%

95%

of the approved credit limit

$0

Annual Fee

$95

Interest Free Days

55

More details

Learn more about credit cards

What is a balance transfer credit card?

If you're an Australian cardholder struggling to pay off credit card debt, and need a little no-interest breathing room to get on top of it, a balance transfer card may offer a lifeline. 

A balance transfer involves moving a debt from your existing card provider to a new balance transfer credit card. It is a popular way to manage debt in Australia. 

The appeal of a balance transfer credit card is that it charges you zero percent interest on your transferred balance, but usually only for a limited time. 

Whether you're looking to stick with a big four bank (CommBank, Westpac, NAB or ANZ), switch to a competitor bank, such as Bankwest, Citi, or Virgin Money, or make the move to online-only banking, there are a range of credit card providers offering balance transfer cards.

The pros of a balance transfer credit card

Balance transfers are not just useful for cardholders who can't manage debt, they can also be great for people wanting fringe benefits for their spending.

The perks and benefits of balance transfer credit cards differ for each card provider. This is why it's worth regularly using a credit card comparison tool to see if your current card stacks up against the competition.

Some of the bells and whistles you may find in a new card could include:

  • Rewards programs (typically found with rewards cards) that allow you to earn rewards points per dollar(s) spent on eligible purchases. These may be exchanged for goods and merchandise in a rewards program.
  • Frequent flyer programs that earn you frequent flyer points per dollar(s) spent.
  • Cash back offers for new applicants.
  • Store card affiliated rewards, such as gift cards or discounts for a specific retailer.
  • Bonus points on sign up, such as bonus Qantas points.
  • Visa, MasterCard or AMEX affiliated rewards.
  • Ongoing, low rates.
  • No account keeping fees.
  • Interest-free days.
  • Complimentary insurance, such as travel insurance.
  • Retail gift vouchers and more.

What you should know about credit card balance transfers

There are also some potential costs and risks associated with balance transfer cards.

  • 1. Balance transfer fees

There are a few potential fees new customers may be charged on your balance transfer card, including some standard card fees and some balance transfer-specific ones.

  • Standard purchase rate: This is the interest rate charged on any new purchases made with your balance transfer credit card. While your transferred debt from your existing credit card may not be charged interest for a set period of time, any new purchases will. This is why it's recommended you lock away your new card in a drawer, or even put it into the freezer, so you're not tempted to spend.
  • Annual fee: Your annual fee is charged to keep your card account open. This can range from $0 to $1,200.
  • Balance transfer fee: A fee charged by the new card provider on your balance transfer amount when you move the existing debt from your old card over to it. The fee is typically charged as a percentage of your balance, also known as the balance transfer rate (around 2 per cent).
  • Cash advance rate: If you were to use your balance transfer card to withdraw money, you may be charged a cash advance interest rate. These are typically higher than the purchase rate, so be wary of how this cost may impact your budget.
  • 2. Balance transfer period 

The amount of time you have to pay off your existing balance without being charged credit card interest is also called the balance transfer period. This balance transfer offer is typically a number of months, and can climb as high as two years. This will vary depending on the credit card providers own terms and conditions.

After a balance transfer credit card's interest free period has expired, the card will revert to its standard purchase rate, which is typically quite high. If you have not paid off your balance in full by the time the balance transfer period ends, the outstanding balance will begin accruing interest at the credit card's standard purchase rate. 

  • 3. Impacting your credit rating

Having an outstanding credit card balance that you're unable to meet repayments on can hurt your credit score. This is a risk cardholders face when they first get a credit card. If you switch to a balance transfer card and are still unable to get on top of your debt, you may hurt your credit rating. 

Further, if you don't review a credit card provider's eligibility criteria before you apply, you may be rejected. Having multiple card applications and being rejected can also hurt your credit rating. 

What types of balance transfer deals are available?

There are a range of zero per cent balance transfer cards from credit card providers on offer in Australia. Here are a few ways they can differ, and what you should keep in mind:

  • Short or long interest free period: the interest-free offer may range from as short as 6 months through to 12 months, 18 months and even 24 months.
  • No fees: the interest-free offer may also come with no ongoing fees, such as annual fees, for a set period of time, typically a year.
  • Interest free introductory cards: Sometimes referred to as 0% purchase cards. Instead of just charging zero per cent interest on your transferred balance, the card provider may offer an interest-free introductory period on all purchases for a set period of time.

Tips for maintaining your credit card bill

Consider following these simple steps and developing healthy credit card habits once you've transferred your balance to a new product:

  • Keep on top of repayments: make your monthly repayments on time, and aim to pay more than the required minimum. Read your credit card product disclosure statement to find out the repayment due date. Remember late payments often result in extra interest charges or late payment fees.
  • Set a lower credit limit: if you don't have a need for a high credit limit, don't set one. If you lack discipline when it comes to spending, a higher credit limit might lead you to live outside of your means.
  • Use the interest-free days to repay purchases: most interest-free periods are only available for a limited period of time. Ensure you know what purchases you make for each statement period and when they need to be repaid before you need to start paying interest.
  • Monitor your spending: keep a list of your credit card purchases. This could help you track your spending and determine whether you're spending within your budget.
    Check your credit card statement: compare your list of credit card purchases against your statement to ensure they match. Make a note of any additional fees charged and look at ways of avoiding them next time.
  • Close your old credit card account completely: if you transferred your credit card balance with the aim of paying it off, and no longer trust yourself to stay within budget using your old card, make sure you properly close and settle your old account. Cutting up a card doesn’t terminate the account, so speak to your provider to find out how to close it off completely.
  • Consider switching to a low rate credit card: once you've paid off your balance with the new credit card, you may find that card no longer suits your spending habits. Perhaps it charges a high ongoing purchase rate, or comes with costly annual fees. Whatever the reason, you may want to consider switching to a low fee or low rate credit card. This way, if you fall into bad habits again you'll have less of a chance of racking up huge amounts of debt thanks to the low interest rate.

Frequently asked questions

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

How to calculate credit card interest

Credit card interest can quickly turn a manageable balance into unmovable debt. So being able to understand how interest rates translate into dollars is an important skill to acquire.

The common mistake people make is focusing on the credit card’s annual percentage rate (APR), which often sits between 15 and 20 per cent. While the APR does provide a rough idea of how much interest you’ll pay, it’s not entirely accurate.

This is because you actually accrue interest on your balance daily, not annually. So, you need to work out your daily periodic rate (DPR). To do this, divide your card’s APR by the number of days in a year (e.g. 16.9 per cent divided by 365, or 0.05 per cent). You can then apply this figure to the daily balance on your credit card.

How do you pay off credit cards?

The best way to pay off a credit card bill is to set a realistic spending budget and stick to it. Each month, you’ll get a credit card statement detailing how much you owe and how long it will take to pay off the balance by making minimum repayments. If you only make the minimum repayments, it will take you years to pay off your outstanding balance and add extra costs in interest charges. To avoid any extra charges, you should pay the entire bill. 

How to get rid of credit card debt

  1. Calculate your debt. Credit card calculators make it easy to determine the repayments required to chip away at your debt in the shortest timeframe possible for your budget.
  2. Repayment plans. Take some time to formulate a credit repayment plan. Consider increasing your income, scaling back your lifestyle or refinancing.
  3. Talk to your credit provider. If you’re still struggling with your debt, give your credit provider a call. You may be able to come to a new arrangement.

Is instant approval possible for credit cards?

Instant approval may be possible – but please note that the term may be misleading. “Instant” approval tends to mean that when you apply online the lender will let you know the likeliness of your eligibility for a credit card within 60 seconds of receiving your application.

How is credit card interest charged?

Your credit card will be charged interest when you don’t pay off the balance on your credit card. Your card provider or bank charges you the individual interest rate that is associated with your card, which is usually between 10 and 20 per cent. 

The interest will be added onto your bill each month or billing period if you don’t pay off the balance, unless you are in an interest-free period.

You will be charged interest on anything that hasn’t been paid for inside the interest-free period. Usually you will receive a notice on your bill or statement saying you will be charged interest so you have some form of notice before you’re charged.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

How does credit card interest work?

Generally, when we talk about credit card interest, we mean the purchase interest rate, which is the interest charged on purchases you make with your credit card.

If you don’t pay your full balance each month (or even if you pay the minimum amount), you are charged interest on all the outstanding transactions and the remaining balance. However, interest is also charged on cash advances, balance transfers, special rate offers and, in some cases, even the fees charged by the company.

The interest rate can vary, depending on the credit card. Some have an interest-free period, otherwise you start paying interest from the day you make a purchase or from the day your monthly statement is issued. So avoid interest by paying the full amount promptly.

How to pay a credit card from another bank

Paying or transferring debt from one lender to the other is called a balance transfer. This involves transferring part or all of the debt from a credit card with one lender to a credit card with another. As part of the process, your new lender will pay out the old lender, so that you now owe the same amount of money but to a new institution.

Many credit card providers offer an interest-free period on balance transfers to help new applicants better handle their debt. During this period, cardholders are not required to pay interest on the debt they brought over from the other card. This can be a great opportunity for consumers to pay off credit card debt with no interest. There are often fees associated with balance transfers; normally, these are a percentage of the amount transferred.

So make sure you read the terms and conditions of the card before transferring any debt across.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.