Compare 18 month balance transfer 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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Millennials shop around for credit cards as spending patterns change
As spending habits shift due to COVID-19, millennials are shopping around for another credit card, with reward programs topping their wishlists.
Credit card or other personal debt is something that many Australians struggle with. It can be easy to be discouraged from paying down your debts aggressively, or even regularly, as you watch them gain more and more interest every month.
If you’re struggling to pay off debt, especially from multiple sources, a balance transfer credit card could be an option for you. There are even some credit cards with a balance transfer of 18 months or more.
What is a balance transfer credit card?
Many credit card providers have a balance transfer offer for new customers. This allows you to transfer your existing credit card (or other personal) debt to your new credit card, and start paying it off at the promotional interest rate for a set period of time.
Many providers offer a 0 per cent interest rate for the promotional period, which could give you some breathing room to stop paying interest on your existing debt, and put together a payment plan to get yourself out of debt.
Can I pay off debt with another credit card?
As unrealistic as that may sound, it’s entirely possible to pay off your debt using a balance transfer credit card. However, whether or not your debt gets paid off during the promotional period will depend entirely on you and the repayments you make. It’s important to crunch the numbers on your own debt.
Unless you have a small amount of debt that can be realistically be paid off in less than 12 months, you might consider shopping around for a balance transfer of at least 18 months. This longer promotional period gives you more time to pay off your debt at 0 per cent interest, but also more time for slip-ups and human error to interfere with your goal.
One of the easiest ways to throw off your debt repayment goals is to use your balance transfer credit card for personal or everyday expenses. Unless you know that you can pay off these expenses almost immediately, it’s usually not a good idea to add more debt to your balance transfer credit card. If you need to, put your new credit card in a safe place, even with a trusted family member or friend, to avoid using it for everyday expenses.
It’s easy to be enticed by the 0 per cent interest rate into adding more debt - large or small - onto your credit card. But bear in mind that the 0 per cent period comes with an expiration date.
So what happens after the interest-free period?
Unless your debt is down to zero by the time the promotional, 0 per cent interest rate period ends, you will immediately start paying interest on your credit card balance. If you do choose a balance transfer credit card, it’s important to be aware and prepared for the end of your interest-free period.
You should also not neglect to consider the interest rate itself. Balance transfers with a 0 per cent interest rate usually make up for their generosity by reverting to a high interest rate of approximately 20 per cent. This means that if you still have $1,000 of debt on your credit card at the end of your interest-free period, you could instantly add an additional $200 to your debt when your interest rate reverts.
What other fees and charges should I consider?
As with all credit cards, you should consider the standard interest rate, annual fee (what you pay each year for the privilege of having a credit card) and late payment fee when considering your options.
Another fee that is unique to balance transfers is the balance transfer fee. This is a percentage - usually less than 2 per cent - of your overall debt that your credit card provider will charge you to transfer your debt from other sources to your new credit card. There are, however, many providers who do not charge this fee, so it’s important to consider whether you are willing to pay an additional amount to transfer your debt.
Should I pay off my debt with a balance transfer credit card?
Balance transfer credit cards and their interest-free periods can be very enticing if you have existing debt that is currently collecting interest. But before making any decisions about committing to a new credit card, you should make a watertight plan of how much you can pay off your debt every month, and how long this will take to pay off the balance in full.
Allow several months of ‘wriggle room’ to account for unforeseen expenses and human error. For example, if you work out that you can pay off your debt in exactly 15 months, consider a balance transfer with at least an 18-month interest free period. If you pay it off early, all the better.
Once you know your limits and what you can realistically commit to, you will have a better idea of whether a balance transfer credit card is right for you.
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.