Compare balance transfer credit cards
Heritage Bank Gold Low Rate
An ongoing low variable interest rate, plus lots of features, makes this one of our most popular credit cards.
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If your credit card balance is larger than you’d like it to be and the interest is starting to add up, it might make sense to transfer the balance over to a card with a more competitive interest rate. Credit card providers are always on the lookout for new customers, and one way of bringing you over is by offering a highly incentivised interest rate on balance transfer deals.
What is a balance transfer card?
A balance transfer card works by literally taking your credit balance from one card and transferring the whole amount over to a new credit card with an incentivised and more affordable interest rate. Generally speaking, balance transfer cards offer 0 per cent promotional rates for a set period of time, which is anywhere between three and 12 months. After the honeymoon period ends, the interest rate usually shoots up and can leave you with a whole lot more in interest and fees.
For a balance transfer card to work in your favour, you’ll ideally need to pay off the balance while the promotional interest rate is still 0 per cent. In some cases, there may be additional fees if you still have an outstanding balance when the promotional period ends. Before you apply for a balance transfer card, make sure you compare your options and leave yourself enough time to pay off your debt.
If you decide that a balance transfer card is right for you, the actual process of rolling your balance over to a new card is relatively simple. When you fill out the application, you’ll provide the name of your current credit card along with the card number. Once you’re approved, the new card provider will reduce the balance of your old card to $0 and transfer it to the new card.
What is a 0% balance transfer card?
Some balance transfer cards offer an introductory 0 per cent interest rate when you transfer your existing balance onto a new credit card. A 0 per cent interest rate is usually valid for a fixed period of time and literally charges you no interest on the amount you transfer over. Depending on the card, you may be charged a one-time transfer fee when you move the balance over. A 0 per cent interest rate can potentially save you from accruing additional interest while repaying your credit card debt.
Credit cards with 0 per cent balance transfer are usually available for periods starting from two months up to 24 months.
The benefits of a balance transfer card
A balance transfer card is a great short-term strategy to save you money and reduce your credit card debt. The major benefit is that you have a definitive period in which to pay back the money you owe without adding any additional interest. Because balance transfer cards are often bundled together with other benefits like reward points or free travel insurance, you might find a credit card that can help you pay off your balance with great benefits.
What to look out for when comparing balance transfer cards
Before you choose a balance transfer card, make sure you check what happens when the promotional period ends. You specifically want to check what the post-promotional interest rate will be. In most cases, they tend to be on the higher side. If you’re not certain you can pay the entire card balance off, do the sums to make sure you're not worse off when the rate reverts back to the standard.
Some cards also charge an initial fee to transfer the balance over, which is added to the balance on the new card. Before you make the switch, compare any additional card or annual fees against what you’re currently paying to ensure you come out on top.
A common misconception with balance transfer cards is that you don’t have to pay anything during the promotional period. This is not the case. Even if the card offers you a 0 per cent interest rate, you still have to pay the minimum balance each month. If the balance transfer card has a period of interest-free days, you won’t be able to take advantage of this until you’ve paid the entire balance off.
When the incentives are so appealing, it can be tempting to apply for multiple balance transfer deals. Every time you make an application for a credit card, it gets recorded on your credit report.
How to use a balance transfer card to consolidate debt
If you’ve got a manageable amount of credit card debt which you can pay off within the card’s promotional period, then a balance transfer card might be worth considering.
The main consideration with balance transfer cards is what happens when the honeymoon period ends. If you’ve done the maths and it’s not likely that you’ll pay the card off before the promotional rate ends, you might be better off exploring other debt consolidation options, like a personal loan.
Before you make a decision, do your research and compare your options to make sure you find a balance transfer card that works for you.
^Depending on your finanical situation, the best balance transfer card for you may not be the best balance transfer card for somebody else. Compare the available options, consider how different features and benefits can help you reach your financial goals, and read the fine print before making any decisions. If you need help deciding on the best credit card for you, consider contacting a qualified financial adviser.
Property Personal Finance Writer
A property and personal finance writer, Nick Bendel covers property, loans, credit cards, superannuation, and other bank products. Nick has previously written for The Adviser, Mortgage Business, Lifehacker, Business Insider, Yahoo Finance, and InvestorDaily, and loves getting elbow-deep in the latest ABS, APRA and RBA data.
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If you have a bad credit score, you might encounter two main problems. First, the lower your credit score, the more likely you are to be rejected when you apply for a loan or any other credit product. Second, if your application is accepted, the less likely you are to qualify for the lowest interest rates.
The reason Equifax, Experian and Illion use different scores is because they are independent companies with their own different methodologies. As a result, a score of, say, 700 would mean different things at different credit reporting bureaus.
However, the one thing they have in common is that they divide their scores into five tiers. So if you receive a tier-two credit score from one bureau, you will probably receive a tier-two score from the others, as well.
Yes, as credit card providers look at your annual income amount as well as your occupation. Minimum income requirements tend to be between $30,000 – $40,000 for standard and rewards credit cards, however low income credit cards can have minimum income requirements as low as $15,000 per year.
There are two reasons you should check your credit rating: so you have a better understanding of your financial position, and so you can take action (if necessary) to improve your credit rating.
Lenders use credit ratings or credit scores to assess loan applications. The higher your score, the more likely you are to get approved, and the more likely you are to be charged lower interest rates and lower fees. Conversely, the lower your credit score, the less likely you are to get approved, and the more likely you are to be charged higher interest rates and higher fees.
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.
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.
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.
There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice.
Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward.
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.
If you’re wondering about how to make a credit card online application, here are some steps to follow:
- Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
- Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
- Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
- Review details. Ensure the information you’ve entered is correct.