Balance Transfer Credit Cards

Struggling to pay off high-interest credit card debt? Compare balance transfer offers to find a card with low or 0% interest, helping you shift your existing balance and accelerate repayment.

Nilooka Dissanayake avatar
Written by   |  
Vidhu Bajaj avatar
Edited by   |  
David Boyd avatar
Verified by
Updated 29 Oct 2024   |   Rates updated regularly

Comparing of 61 balance transfer credit cards

Featured
Citi Rewards Card Balance Transfer and Purchase Offer

On Citi's website

Balance transfer

15 months at 0% p.a.

Purchase rate

15 months at 0% p.a.

Interest-free days

44 days

Annual fee

$199.00 p.a. ongoing

Details

  • 0% p.a. for 15 months on purchases and balance transfers. Balance transfer reverts to cash advance rate.
  • Complimentary mobile phone insurance when you pay your monthly mobile plan bill with your Citi Rewards Credit Card . See Terms and Conditions here.
  • Earn up to 1 Citi reward point for every $1 spent.

This product is provided by National Australia Bank Limited, using certain trademarks under license from Citigroup Inc.

Pros & cons

Pros
  • 0% p.a. on balance transfers and purchases for the first 15 months.
  • No balance transfer fee.
  • Earn up to 1 Citi reward point for every $1 spent.
  • 10% off Limited Time LUX Exclusive hotel offers (up to $250 per booking) booked by 1 March 2025.
Cons
  • There is a 2% BT fee.
  • Balance transfer changes to a 22.24% p.a. cash advance rate after 15 months.
  • Fee for an additional card is $90.
Citi Clear Credit Card

On Citi's website

Balance transfer

24 months at 0% p.a.

Purchase rate

14.99% p.a. ongoing

Interest-free days

44 days

Annual fee

$49.00 for 1st year

Details

  • 0% p.a. for 24 months with a 1.5% fee. Reverts to 22.24% p.a.
  • Set up Citi PayAll to pay rent, tax, and other bills with your card.
  • Monthly cashback offers from stores you already shop with via Citi MyCashback.
  • 10% off Limited Time LUX Exclusive hotel offers at Luxury Escapes.

This product is provided by National Australia Bank Limited, using certain trademarks under license from Citigroup Inc.

Pros & cons

Pros
  • Long interest-free balance transfer period (24 months).
  • Competitively low ongoing purchase rate (14.99% p.a.).
  • Add up to 4 cardholders for free (enough for most families).
  • Up to 44 days interest-free on retail purchases.
  • 10% off Limited Time LUX Exclusive hotel offers until 1 March 2025.
  • City PayAll means you can use credit for bill payments.
  • My Cashback offers are personalised and require no opt-in or registration.
Cons
  • No rewards program, but this card is about simplicity.
  • High revert rate on balance transfers (22.24% p.a.).
  • Purchases have no interest-free days while there's a balance transfer.
Bankwest Zero Platinum Mastercard

On Bankwest's website

Balance transfer

6 months at 0% p.a.

Purchase rate

6 months at 0% p.a.

Interest-free days

55 days

Annual fee

$0.00 p.a. ongoing

Details

  • 0% p.a. for 6 months on purchases and balance transfers, with a 3% balance transfer fee. (Reverts to 18.99% p.a. thereafter.)
  • No foreign transaction fees, including when you're shopping at an overseas online store.
  • No annual fee to pay for the life of the card.
  • Put up to five eligible purchases on an interest-free payment plan with Easy Instalments.
  • Credit limits start from a minimum of $6,000.

Pros & cons

Pros
  • No annual fee makes this an option for occasional or backup use.
  • Interest-free purchases and balance transfers for 6 months.
  • No foreign transaction fees for foreign currency or overseas purchases.
  • Interest-free repayments for up to five eligible purchases with Easy Instalments.
  • Credit limits start from a minimum of $6,000.
  • Up to 55 days interest-free when you pay the statement balance in full.
  • Balance transfers revert to the purchase rate instead of the higher cash advance rate.
  • Use up to 95% of your credit limit for balance transfers.
Cons
  • There is a 3% fee on balance transfers, which can be added to the balance if desired.
  • You can't earn rewards points, but that's not unusual for a no annual fee card like this.
  • There is a $500 minimum balance transfer amount, although most people transfer more.
Bankwest Zero Mastercard

On Bankwest's website

Balance transfer

6 months at 0% p.a.

Purchase rate

6 months at 0% p.a.

Interest-free days

55 days

Annual fee

$0.00 p.a. ongoing

Details

  • No annual fees for the life of the card.
  • 0% p.a. for 6 months on purchases and transferred balances (with a 3% balance transfer fee). Returns to 18.99% p.a. thereafter.
  • Available to new customers for a limited time. Additional fees, charges, and terms and conditions apply.

Pros & cons

Pros
  • There is no annual fee for as long as you keep the card.
  • The introductory balance transfer and purchase offers.
  • Interest on purchases is comparatively low.
  • Up to 55 days interest-free on purchases.

Cons
  • Balance transfers incur a one-off fee.
  • You cannot earn credit card points.
Bankwest Breeze Platinum Mastercard

On Bankwest's website

Balance transfer

24 months at 0% p.a.

Purchase rate

12.99% p.a. ongoing

Interest-free days

55 days

Annual fee

$59.00 p.a. ongoing

Details

  • Get 0% p.a. interest on balance transfers for 24 months, with a 3% balance transfer fee (then 12.99% p.a. thereafter).
  • Benefit from up to 55 interest-free days.
  • Offer exclusively for new customers within a specified period. Additional charges, along with terms and conditions, apply.

Pros & cons

Pros
  • 0% p.a. on balance transfers for 24 months.
  • Low ongoing interest rate on purchases.
  • No foreign transaction fees.
  • Plus, complimentary overseas travel insurance for you and your family.
Cons
  • There is no rewards program on this card.
  • There is a 3% BT fee.
Bankwest Breeze Mastercard

On Bankwest's website

Balance transfer

24 months at 0% p.a.

Purchase rate

12.99% p.a. ongoing

Interest-free days

55 days

Annual fee

$49.00 p.a. ongoing

Details

  • Get 0% p.a. interest on balance transfers for 24 months, with a 3% balance transfer fee (then 12.99% p.a. thereafter).
  • Enjoy up to 55 interest-free days on purchases.
  • Available to new customers for a limited time. T&Cs and fees apply.

Pros & cons

Pros
  • 0% p.a. on balance transfers for 24 months.
  • Low ongoing interest rate on purchases.
  • Up to 55 interest-free days on purchases.
Cons
  • There are no rewards on this card.
  • There is a 3% BT fee.
Apply by 30 November 2024
St.George Vertigo Visa Credit Card

On St.George's website

Balance transfer

28 months at 0.99% p.a.

Purchase rate

13.99% p.a. ongoing

Interest-free days

55 days

Annual fee

$55.00 p.a. ongoing

Details

  • Benefit from a 28-month 0.99% interest period on Balance Transfers, with no balance transfer fee. Afterward, it switches to a cash advance rate of 21.99% p.a.
  • Enjoy a low variable interest rate of 13.99% p.a. on purchases.
  • The annual fee remains low at $55 p.a.

Pros & cons

Pros
  • 0.99% p.a. for 28 months on balance transfers with no balance transfer fee.
  • 13.99% p.a. low variable interest rate on purchases.
  • Low annual fee of $55 p.a.
Cons
  • Balance transfer rate reverts to 21.99% p.a. after 28 months.
  • There are no rewards program for this card.
NAB Low Rate Credit Card

On NAB's website

Balance transfer

28 months at 0% p.a.

Purchase rate

13.49% p.a. ongoing

Interest-free days

55 days

Annual fee

$0.00 for 1st year

Details

  • Experience 0% p.a. on balance transfers for 28 months with a 2% balance transfer fee. Reverting to a variable cash advance rate of 21.74% p.a. after the promotional period.
  • Initial $0 annual card fee for the first year ($59 p.a. thereafter).
  • Receive a response within 60 seconds.

Pros & cons

Pros
  • 0% p.a. on balance transfers for 28 months.
  • A variable purchase rate of 13.49% p.a.
  • The waived annual fee for the first year.
  • Additional credit card is free.
Cons
  • There is a 2% balance transfer fee.
  • No rewards program for this card.
  • No insurance coverage.
NAB Rewards Signature Credit Card

On NAB's website

Balance transfer

12 months at 0% p.a.

Purchase rate

20.99% p.a. ongoing

Interest-free days

44 days

Annual fee

$145.00 for 1st year

Details

  • Earn up to 180,000 bonus NAB Rewards points. (130,000 bonus points upon spending $3,000 within the initial 60 days from the account approval date and an additional 50,000 bonus points upon maintaining your card open for over 12 months. Terms and conditions apply.)
  • No cap on the number of points you can earn, although the earn rate reduces on spend above $15,000 in a statement period.
  • Transfer points from NAB Rewards to Flybuys, Velocity Frequent Flyer, KrisFlyer, Asia Miles, Airpoints, or Accor Live Limitless.
  • Mobile insurance covering accidental damage and theft.
  • International and domestic travel insurance, and more.
  • No foreign transaction fees on purchases or when shopping from overseas online stores.

Pros & cons

Pros
  • Up to 180,000 bonus NAB Rewards Points when you meet the criteria.
  • No cap on how many points you can earn.
  • NAB Rewards have several transfer partners, giving you options for flight redemptions.
  • Points can be redeemed for cashback, gift cards, and travel with Webjet.
  • Use points to shop the NAB Rewards Store.
  • 0% p.a. on balance transfers for 12 months.
  • International and domestic travel insurance.
  • Credit limits start from $15,000, which is more than enough for most.
  • Free additional cardholder, meaning you can put more spend through the card.
  • 24/7 access to the NAB Concierge Service for reservations and assistance.
Cons
  • There is a 3% balance transfer fee, which can be added to the balance.
  • Instead of an annual fee, there is a monthly fee, which is waived if you spend more than $5,000 in the statement period.
  • Up to 44 interest-free days when you pay the statement in full, which is on the low side.
  • Qantas Frequent Flyer is not a transfer partner.
  • Purchase rates are on the high side, if you carry a balance.
HSBC Platinum Credit Card

On HSBC's website

Balance transfer

12 months at 0% p.a.

Purchase rate

19.99% p.a. ongoing

Interest-free days

55 days

Annual fee

$0.00 for 1st year

Details

  • Utilize the 0% p.a. offer on balance transfers for 12 months alongside a 2% balance transfer fee.
  • Experience the inaugural year with no annual fee, followed by $149 annually thereafter.
  • Accrue 2 Reward Plus points per $1 spent on qualifying overseas purchases and 1 Reward Plus point per $1 spent on other eligible purchases.
  • Maintain a minimum credit limit of $6,000.

Pros & cons

Pros
  • 0% p.a. on balance transfers for 12 months.
  • $0 annual fee for the first year.
  • Enjoy 2 airport lounge passes every year.
  • Benefit from HSBC Instant Savings with exclusive dining and shopping discounts.
  • Includes complimentary travel and purchase protection insurance.
  • Choice of points transfer partners (Asia Miles, KrisFlyer, Velocity Frequent Flyer).
Cons
  • The balance transfer rate reverts to 21.99% p.a. after 12 months.
  • 2% balance transfer fee.
  • The 10,000 points cap per statement period.
Apply by 30 November 2024

Balance transfer

28 months at 0.99% p.a.

Purchase rate

13.99% p.a. ongoing

Interest-free days

55 days

Annual fee

$55.00 p.a. ongoing

Details

  • Benefit from a 28-month 0.99% interest period on Balance Transfers, with no balance transfer fee. Afterward, it switches to a cash advance rate of 21.99% p.a.
  • Enjoy a low variable interest rate of 13.99% p.a. on purchases.
  • The annual fee remains low at $55 p.a.

Pros & cons

Pros
  • 0.99% p.a. for 28 months on balance transfers with no balance transfer fee.
  • 13.99% p.a. low variable interest rate on purchases.
  • Low annual fee of $55 p.a.
Cons
  • Balance transfer rate reverts to 21.99% p.a. after 28 months.
  • There is no rewards program for this card.
ANZ Low Rate Credit Card

On ANZ's website

Balance transfer

28 months at 0% p.a.

Purchase rate

13.74% p.a. ongoing

Interest-free days

55 days

Annual fee

$0.00 for 1st year

Details

  • Enjoy 0% p.a. for 28 months on balance transfers with a 3% balance transfer fee (then reverts to 21.99% p.a.) Terms and Conditions apply.
  • First-year annual fee waived ($58 subsequently).
  • Continuous low rate of 13.74% p.a. on purchases.
  • Enjoy up to 55 days interest-free on purchases by settling your account completely each month.

Pros & cons

Pros
  • Enjoy 0% p.a. on balance transfers up to 28 months.
  • $0 annual fee for the first year ($58 p.a. thereafter).
  • Take advantage of the low purchase interest rate of 13.74% p.a.
  • Add up to 3 additional cardholders at no extra cost.
Cons
  • No purchase or travel insurance included.
  • No rewards program.

Balance transfer

12 months at 0% p.a.

Purchase rate

19.99% p.a. ongoing

Interest-free days

55 days

Annual fee

$349.00 for 1st year

Details

  • Get up to 100,000 bonus Qantas Points. Get 70,000 bonus Qantas Points upon spending $3,000 or more on eligible purchases within 3 months from card approval. Plus, an extra 30,000 bonus points if you haven't earned Qantas Points with a credit card in the past 12 months. Terms and Conditions apply.
  • Benefit from 0% on Balance Transfer for 12 months with a 2% Balance Transfer fee. Returns to Cash Advance rate thereafter. No interest-free days are applicable on retail purchases with an outstanding balance transfer.
  • Benefit from the reduced annual fee of $349 p.a. for the initial year. An ongoing annual fee of $399 p.a. is applicable in the 2nd year.

Pros & cons

Pros
  • Earn up to 100,000 bonus Qantas Points when you meet the criteria.
  • 0% p.a. for 12 months on balance transfers.
  • Additional savings with the $349 first-year annual fee.
  • Comes with complimentary travel insurance.
Cons
  • The annual fee increases to $399 p.a. after the initial year.
  • There is a 2% balance transfer fee.
Apply by 5 November 2024

Balance transfer

15 months at 0% p.a.

Purchase rate

13.49% p.a. ongoing

Interest-free days

55 days

Annual fee

$58.00 p.a. ongoing

Details

  • 0% per annum (p.a.) for balance transfers spanning 15 months. Afterward, it reverts to the cash advance rate of 20.74% p.a.
  • Enjoy a modest annual fee of $58 p.a.
  • Earn 1 Flybuys Point for every $2 spent at Coles Supermarkets.

Pros & cons

Pros
  • 0% p.a. on balance transfers for 15 months.
  • Complimentary access to your 24/7 local concierge.
  • Interest-free for up to 55 days.
Cons
  • There is a 1.5% balance transfer fee.
  • You can only earn Flybuys points at Coles Supermarkets.
  • No interest-free days while you have a balance transfer.
Virgin Australia Velocity High Flyer Credit Card

On Virgin Money's website

Balance transfer

12 months at 0% p.a.

Purchase rate

20.74% p.a. ongoing

Interest-free days

44 days

Annual fee

$329.00 p.a. ongoing

Details

  • Up to 80,000 bonus Velocity Points upon spending $3,500 on eligible purchases within 4 months of card approval. Terms and conditions apply.
  • 0% p.a. interest for 12 months on balance transfers (no balance transfer fee applies). Reverts to cash advance rate of 20.99% p.a.
  • Receive an exclusive $129 Virgin Australia Gift Voucher annually. Terms and Conditions apply.

Pros & cons

Pros
  • Earn up to 80,000 bonus Velocity Points when you meet the criteria.
  • Earn 1 Velocity Point per $1 spent on eligible transactions up to $8,000 and 0.5 points per $1 on spending thereafter.
  • Two single entry passes for Virgin Australia domestic lounges every year.
  • Flight voucher worth $129 each year.
  • Comes with International Travel Insurance and Extended Warranty Service.
  • Works with Apple Pay and Samsung Pay.
Cons
  • The ongoing annual fee of $329 p.a.
  • Earn rate is tiered, although the base tier is enough for more people.
  • Only up to 44 interest-free days on purchases.
  • There's an annual fee per additional card.

What is a balance transfer credit card?

A balance transfer credit card allows you to transfer the outstanding balance from one or more of your current credit cards to a new credit card with a lower interest rate. The primary objective is to pay off the existing balance more quickly while saving on interest charges.

Certain credit cards come with balance transfer offers, which provide a reduced interest rate on the transferred balance for a specific 'balance transfer period'. The most competitive balance transfer deals offer a 0% interest rate, with balance transfer periods typically ranging from six months to two years and sometimes even longer on select cards.

Once the introductory period ends, any outstanding balance on the new credit card will be subject to the standard credit card interest rate. It's important to note that balance transfers can be made using either personal or business credit card balances.

When considering a balance transfer, it's essential to compare the available offers and carefully review the terms and conditions to ensure you select the best credit card that suits your financial situation.

How much money could you save with a 0% balance transfer?

How much you could save with a 0% balance transfer depends on your existing balance and the interest rate on your current card. For example, if you have $5,000 in debt on a card with a 20% interest rate, you’d be paying around $1,000 in interest over a year.

By transferring that balance to a card with a 0% interest offer for 12 months, you could save that $1,000—provided you pay off the balance before the offer ends.

Helpful tip: Use our Balance Transfer Savings Calculator to see how much money you could save!

What to consider before applying for a balance transfer credit card

Most people apply for a balance transfer credit card to repay their credit card debt in a short period of time. However, it's crucial to be realistic about your ability to repay the transferred amount within the low or 0% interest period. If you can't clear the balance in this time frame, you might face higher interest rates, potentially increasing your financial burden.

Here are some things to consider before applying for a balance transfer credit card to make an informed choice.

  1. Interest rate. The low or 0% introductory interest rate on the card typically lasts from six months to two years. Make sure you review the interest rate that will apply once the promotional period ends to avoid any unpleasant surprises.
  2. Fees and other charges. Be aware of any balance transfer fees, annual fees, or other charges associated with the card. Some credit card providers may charge you a percentage of the amount being transferred (commonly around 2-3%), which could add to your costs.
  3. Credit limit. Ensure the new card has a sufficient credit limit to accommodate the balance you intend to transfer.
  4. Credit score. Your credit score plays a significant role in determining your eligibility for a balance transfer offer and the terms you're likely to receive.
  5. Debt management. A balance transfer credit card can help you manage your credit card debt by potentially saving you money in interest charges. However, a balance transfer credit card is typically useful for those who can commit to timely repayments. Missing payments can lead to penalties and hurt your credit score

If you're in serious financial trouble or struggling to manage your debts, transferring your balance to another credit card may not be the right solution for you. Consider seeking help by contacting the National Debt Helpline or visiting the MoneySmart website for more information on debt and financial hardship management.

Here’s how a Credit Card Compare expert chose his balance transfer card

David Boyd of Credit Card Compare

When Credit Card Compare co-founder David Boyd compared balance transfer cards, he explains what he was looking for.

After Covid I had racked up some credit card debt and needed a solution that wouldn’t strain my income. After comparing balance transfer options, I decided to go with the ANZ Low Rate Card. My main priority was finding a card with the longest 0% interest period, and the ANZ Low Rate Card offered 0% p.a. on balance transfers for 28 months. At that time, that was better than most other options.

Every dollar saved counts when you’re trying to beat down the debt on a card. I considered other cards, but ANZ had no annual fee for the first year, a reasonable balance transfer fee, and a competitive revert rate after the intro period. For me, it was the perfect balance of long-term savings and manageable costs.

How Australians are using balance transfer credit cards

Many Aussies are debating whether to use a 0% balance transfer card to get their debt under control or to use other means, such as emergency savings.

For example, on Reddit a user asked if doing a 0% balance transfer was a good idea to reduce the interest paid on $9,400 of debt on two cards.

Another Redditor said that they had used credit card balance transfer offers to reduce their debt: "14k in debt now down to 2k and not a cent in interest paid".

One particularly financially astute Redditor shared an innovative balance transfer use case:

"Paid for $20k trip on credit card. Balance transfer for 1% at 0% interest for 24 months. Put the $20k I would have used to pay the credit card with into super for carry forward contributions. Claim 30% tax credit and keep that in my offset for 2 years saving me about $800 interest. Also collecting 2 years of interest in my super on that $20k. So in all for a small 1% fee of $200 I'm gaining nearly $10k over 2 years. Essentially cutting my trip costs by 50%."

Balance transfer terms to know about when comparing balance transfer credit cards

Before applying for a balance transfer card, ensure you choose the one that best suits your financial needs. Research and compare multiple balance transfer offers to find the best deal for your situation.

  • The introductory interest rate. Choosing the lowest possible introductory rate can help reduce the interest charges on your transferred balance during the offer period.
  • The length of the introductory offer. The duration of the low or 0% interest rate period typically ranges from a few months to a couple of years. A longer promotional period could give you more time to repay your balance without incurring interest.
  • Revert rate. The revert rate is the interest rate that applies after the promotional period ends. Knowing the revert rate is crucial if you cannot repay the balance within the promotional period, as it will impact your future repayments.
  • Balance transfer fee. This refers to the fee charged to transfer your balance. It is usually a fixed amount or a percentage (1-3%) of the balance transferred. Finding a low or waived balance transfer fee can help ensure that the costs do not offset the interest savings.
  • Annual fees and other charges. A low or no annual fee card could help reduce overall costs, especially if you plan to hold the card long-term. It is also worth comparing other potential charges, such as any late payment fees or foreign transaction fees, to understand the real cost of the card to you.
  • Interest-free days. Most cards offer a certain number of days where you are not charged any interest on purchases. However, balance transfer cards typically don’t offer any interest-free days on new purchases.
  • Rewards and benefits. Some credit cards may offer additional rewards like cashback or balance transfer offers with Qantas Points. You may want to check whether a card offers any extras, and if you need to pay any additional fees for these features.

How to do a credit card balance transfer

Transferring your credit card balance to a new card can take anywhere from a few days to three or four weeks, depending on the card issuer and the complexity of your application.

1. Determine the balance transfer amount

Calculate the total amount you need to transfer to your new balance transfer credit card. You can usually transfer balances from multiple cards if necessary.

2. Verify your eligibility

The new credit card will have specific eligibility criteria you must meet, including income requirements and a minimum credit score. Make sure you review these criteria before applying. Consider checking your credit score beforehand to assess your chances of approval.

3. Apply for the credit card

Research and compare various balance transfer offers and apply for the one that best fits your financial needs. The application process is generally quick, but your approval could take several days. When submitting your application, you’ll most likely need to provide details about the balance transfer amount and the existing credit card provider(s). You’ll also need to provide information about your income and expenses and include proofs such as your payslips and bank statements.

4. Activate the new card and close your old account

Once approved, your new provider will assist you in setting up online banking, enabling you to manage your card from your mobile device. If the balance on your old card has been fully cleared, consider closing the account entirely to prevent any further spending or incurring fees.

How to maximise your 0% balance transfer savings

A 0% balance transfer can save you a lot in interest, but here’s how to maximise those savings:

  1. Transfer your balance ASAP. Initiate the transfer immediately to stop interest from accruing on your old debt. Most offers require the transfer to be done within a set period.
  2. Keep paying your old card. Until your balance transfer is confirmed, continue making payments on your old card to avoid damaging your credit score.
  3. Set a repayment plan. Pay off as much as possible during the 0% period. A clear plan helps you avoid interest when the promo ends.
  4. Don’t miss payments. Missing a payment could void your 0% offer, so stay on top of your repayment schedule to keep the deal intact.

Expert opinion: What is the mistake people make most often with balance transfers?

Andrew Boyd of Credit Card Compare

Andrew Boyd, co-founder of Credit Card Compare, explains what the biggest mistake Australians make when taking out a balance transfer.

Balance transfer cards can offer significant savings on interest for those with high debt. However, it’s essential to look at your entire financial situation and stay committed to paying off the transferred balance without adding new debt. One of the biggest mistakes is racking up a balance on the old card again.

If you don’t pay off the transfer before the 0% period ends, you could find yourself in a worse financial position. To make a balance transfer work, you need to stay disciplined and focused on clearing your debt.

Benefits of a balance transfer credit card

Some benefits of using a balance transfer credit card include lower interest rates, debt consolidation, and savings on interest charges.

1. Save on interest

If you have a credit card balance of $5,000, with a purchase rate of 18%, and make $300 monthly payments, without any additional purchases, you will pay off your card in 20 months. However, you'll pay $796 in interest during that period.

By transferring your $5,000 to a balance transfer credit card offering 0% p.a. interest for 18 months, you can pay off your debt three months ahead and save on the almost $800 in interest. Those carrying higher balances stand to save thousands with an interest-free balance transfer offer.

2. Pay off your credit card debt faster

You can pay off your debt faster when interest is not adding up month by month. This is because your entire monthly payment goes towards paying off the principal amount. Paying more than the minimum repayment accelerates this.

3. Balance transfers can simplify your finances

Debt consolidation refers to taking out one facility to pay off a number of different balances. Consolidation makes debt management easier because you are less likely to lose track or miss payments. With an interest-free balance transfer offer, you can also reduce the total interest you end up paying.

4. They can reduce financial stress

Grappling with credit card debt can be very stressful, especially if you are struggling to keep up with repayments. If it starts affecting your mental health, seek help if needed with the National Debt Helpline, who offer anonymous assistance.

Transferring debt to a balance transfer card with low or no interest can help you relieve that stress and free up money to make progress towards getting out of debt.

5. May help improve your credit score

A balance transfer can lower your overall credit utilisation ratio, or the level (percentage) to which you are using your credit limit. This matters because credit utilisation plays a role in determining your credit score.

Help choosing a balance transfer credit card

Explore how balance transfer cards can help you manage debt more effectively.

  • FAQs

  • Pros & cons

  • Tips

  • Alternatives

  • Why trust us

How long does a balance transfer take?

A balance transfer could take anywhere from a couple of days to several weeks to process once your card is activated. Ensure that you continue making payments on your current credit card in the meantime.

Is there a limit to how much can be balance transferred?

How much can be transferred in a balance transfer depends on a number of factors.

  • Credit limit on your balance transfer credit card: You won't know your credit limit until your application has been approved because the credit limit depends on your creditworthiness, credit score, and other factors such as income.
  • Balance transfer limits: Separately, there is a limit on how much can be balance transferred. This limit varies between issuers. Some issuers allow balance transfers up to 100% of the credit limit. Others may cap transfers, with 80% upwards being common.

How many times can you do a credit card balance transfer?

You may be able to perform multiple credit card balance transfers by switching card issuers, but there are important factors to consider. Each balance transfer may come with a fee, typically a percentage of the amount being transferred, which can add up and reduce the overall savings from the lower interest rate

Additionally, it’s important to be aware that each balance transfer may involve a hard inquiry on your credit report, which can temporarily lower your credit score. Too many hard inquiries in a short period can signal to lenders that you may be a higher risk, which can further impact your credit score.

What happens after an introductory balance transfer ends?

When an introductory balance transfer period ends, the interest rate on any remaining balance reverts to a higher rate known as the revert rate. This revert rate is typically much higher than the original introductory balance transfer rate and could even exceed the interest rate on the credit card from which you transferred your balance.

Paying off the transferred balance before the promotional period ends can prevent you from incurring higher interest charges. Avoiding new purchases on the card can help manage additional debt. If there's still a balance remaining on your card at the end of the promotional period, transferring it to another card with a new introductory offer may be an option. However, you need to keep in mind any potential fees and the impact on your credit score.

Can a balance transfer credit card be used for purchases?

It's possible to use a balance transfer card for purchases if you have available credit. However, additional spending may increase your overall debt, meaning it may take longer and cost more to pay off. It's important to remember that purchases on a balance transfer card may incur interest since the balance transfer rate applies to balance transfers, not purchases.

If you plan to use a balance transfer card for new purchases, check the applicable interest rate and other terms and conditions to avoid any surprises. Some cards may offer low rates on both purchases and balance transfers, typically only for an introductory period of several months. However, purchases on some balance transfers cards have no interest-free days, meaning interest begins to accrue from the date of the purchase.

Can a balance transfer credit card be used to repay debt?

Yes, balance transfer credit cards are designed to help cardholders pay off existing credit card balances. These cards offer a low interest rate (or even a 0% interest rate) on the transferred debt for a specified period after the balance has been transferred.

However, to effectively use a balance transfer credit card to repay debt, it's crucial to manage the card carefully. The primary goal should be to clear the debt entirely during the promotional offer period while avoiding accumulating any additional debt.

When considering a balance transfer credit card, comparing offers from various providers and reading the terms and conditions thoroughly is essential. Look for a card with a low interest rate, a lengthy promotional period, and a credit limit that can accommodate your existing debt.

Is a longer introductory 0% balance transfer better?

If you aren't in a rush to pay off the debt, then a longer introductory 0% balance transfer offer means you can spread it out and pay less each month.

For example, if you balance transferred $5,000 at 0% p.a. for 12 months, you'd have to pay $417 each month to be debt-free before the introductory offer lapses. However, if you transferred the same amount for 28 months, that would drop to $179 each month.

Pros

Balance transfers can simplify your finances

Balance transfers allow for debt consolidation, enabling you to combine multiple balances onto a single credit card and pay them off together. This makes debt management easier as you are less likely to lose track or miss payments. An interest-free balance transfer offer can also reduce the total interest you end up paying.

Save on interest charges

One of the primary benefits of a balance transfer credit card is the potential to save significantly on interest charges. By transferring your existing high-interest credit card balance to a card with a 0% introductory interest rate, you can focus on paying down the principal balance without the added burden of accruing interest.

Example: If you have a credit card balance of $5,000 with an 18% purchase rate and make $300 monthly payments without any additional purchases, you will pay off your card in 20 months, incurring $796 in interest during that period. By transferring your $5,000 balance to a balance transfer credit card offering 0% interest for 18 months, you can pay off your debt three months earlier while also saving on the interest charges.

Pay off your credit card debt faster

Paying off your credit card debt faster becomes achievable when you eliminate accumulating interest each month. With a balance transfer credit card offering a 0% introductory interest rate, your entire monthly payment goes directly towards reducing the outstanding balance. This accelerates the repayment process since you are not diverting funds to cover interest charges.

Reduce financial stress

Grappling with credit card debt can be very stressful, especially if you are struggling to keep up with repayments. Transferring your debt to a balance transfer card with low or no interest can help alleviate some of that stress by reducing interest charges, enabling you to repay the debt faster. However, if the stress starts affecting your mental health, seek assistance from the National Debt Helpline offering anonymous support and guidance.

Cons

Balance transfer fees

Most balance transfer cards charge a balance transfer fee, which is usually a fixed percentage of the transferred balance. While this one-off fee may vary between credit card providers, it's important to calculate whether the savings from lower interest rates outweigh these initial costs.

High revert rates

Once the introductory period ends, any remaining balance will be subject to the card’s standard interest rate, which can be higher than your current rate. If a substantial balance remains after the introductory period and it reverts to a high rate, the resulting interest can potentially negate some of the savings previously made.

Potential to incur more debt

New purchases made with the balance transfer card may attract the standard interest rate from day one. Balance transfer cards typically do not offer interest-free days on new spending during the balance transfer period. This could complicate your repayment strategy and potentially lead to higher interest costs.

Balance transfer limits apply

How much you can transfer may be restricted by the balance transfer limit (which is typically not the same amount as the credit limit).

Pay more than the minimum repayment amount

Making only the minimum monthly payment won't be enough to clear the debt during your credit card's balance transfer period.

Instead, calculate the amount you need to repay on the new card by the monthly due date to pay off the entire balance within the interest-free term.

If you have extra cash available, consider making one-off transfers to your credit card. At 0% interest, every dollar you repay reduces your balance, providing an opportunity to become debt-free more quickly if you have the discipline to do so.

Close your old card

If your new card's credit limit is sufficient to transfer the entire balance from your old card, and your balance transfer application is successful, you may consider closing your old card.

Contact your provider and request that they cancel the account completely. Simply cutting up the card or removing it from your mobile wallet doesn't guarantee the account is cancelled. Technically, you'll still have a credit card account, and you could continue to be charged fees.

Be aware that if your old card offered complimentary travel insurance that you rely on, you will lose that cover once the card is cancelled.

Avoid new purchases on your balance transfer card

New spending on a balance transfer card can be problematic for two reasons:

  • Adding to your balance will make it harder to clear.
  • New purchases generally incur interest, meaning they are not eligible for the low-interest balance transfer offer you signed up for.

The purpose of a balance transfer is to lower your overall credit footprint, not increase it. Use the new card solely to pay down the old debt, and take necessary measures to ensure you don't spend on it.

Create a spending budget and plan

Following the above steps will be easier if you have a budget to help manage your spending. Consider creating a written budget or using budgeting apps to outline your regular expenses.

Determine how much you need for essential spending each month, fortnight, or week, with some extra for optional costs if desired. Having a firm budget to work from can be an effective way to avoid overspending for some people.

Debt consolidation loans

A personal loan might be an alternative to a balance transfer credit card if you’re looking for a longer term to repay your credit card debt. With a personal loan, it is possible to choose a fixed interest rate, making monthly payments predictable and easier to manage. Personal loans also typically offer longer repayment terms compared to many balance transfer credit cards, providing more time to pay off your debt.

If you’re looking for a way to simplify your finances, a personal loan could also be used to consolidate multiple debts into one loan. However, interest rates on personal loans can be higher than the introductory rates offered by balance transfer credit cards, especially if you have a lower credit score. Additionally, some personal loans come with application fees and may charge other ongoing fees that can increase the overall cost.

Peer-to-peer loans

Platforms like SocietyOne or Harmoney offer personal loans funded by investors, which can have competitive rates for debt consolidation.

Home loan refinance for debt consolidation

The interest rate on a home loan is typically lower than the rates for other types of debt, such as personal loans or credit cards. Consolidating high-interest debt, like credit card balances, into your home loan can significantly reduce your monthly repayment amount. Additionally, having a single repayment can be more convenient, especially if you were previously managing multiple credit card debts. However, it's important to consider the duration of your home loan term. By converting short-term debts into a long-term mortgage, you may end up paying more in total interest over time, even with a lower interest rate, due to the extended repayment period. Therefore, it's crucial to run the numbers to determine if debt consolidation will save you money in the long run.

Methodology

When choosing what cards to include in our balance transfer credit card comparison table and its rank order, we considered the following attributes and their associated metadata.

  • Annual fee initial year: The first year’s annual card fee amount. Lower is better.
  • Annual fee ongoing: How much is charged each subsequent year to renew the card. Lower is better.
  • Apple Pay enabled: Whether the card can be added to Apple Pay. The convenience of contactless payments is considered a benefit.
  • Balance transfer offer: What the introductory balance transfer rate is and how long it lasts. Lower rates for longer periods are considered better.
  • Balance transfer fee: How much it costs to do a balance transfer. Lower is better.
  • Balance transfer from personal loan: If personal loan balances can also be transferred. Added flexibility in debt consolidation is considered better.
  • Balance transfer limit: The maximum amount permitted to transfer to the new card. Higher limits provide more consolidation flexibility.
  • Card type: Whether the card runs on American Express, Mastercard, Visa, or other network. Some credit card payment networks have better acceptance than others.
  • Foreign exchange fee: How much the surcharge is when transacting while overseas or with an overseas online store. Lower is better.
  • Interest-free period: The number of interest-free days from statement. Longer is better.
  • Introductory purchase rate: If there is an introductory purchase rate offer. Lower interest rates are considered better.
  • Late payment fee: If a fee is charged should the minimum repayment be made past the due date and how much it is. Lower is better.
  • Maximum credit limit: The highest credit limit offered, if publicised by the bank.
  • Minimum credit limit: The lowest credit limit offered, if publicised by the bank.
  • Minimum income required: Minimum gross annual individual/household income to qualify. Lower thresholds increase eligibility.
  • Purchase rate ongoing: The standard interest rate on purchases after any introductory periods end. Lower ongoing rates are considered better.
  • Rewards program: Whether the card earns rewards (points, cashback, etc. per dollar spent), the flexibility of rewards, and their value.
  • Samsung Pay enabled: If the card can be added to Samsung Pay. The convenience of contactless payments is considered a benefit.
  • Sign-up bonus: Whether there is a sign-up bonus on offer, what the bonus comes as and its value, and qualifying criteria. A sign-up bonus is considered beneficial.

Our rankings may not reflect what matters most to you. Be sure to compare key rates, fees, and features against your own financial priorities before deciding.

Sources

  1. Loans and credit cards – ASIC
  2. Check your credit score – Finty
  3. Credit card balance transfers – Moneysmart
  4. Credit card debt statistics – Credit Card Compare
  5. Credit scores and credit reports – Moneysmart
  6. Financial hardship – Moneysmart
  7. Managing debt – Moneysmart
  8. Payments data – RBA

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