Balance Transfer

Balance Transfer

Balance transfer credit cards have become increasingly popular due to the fact that they enable debt reduction on multiple credit cards to be consolidated. The feature of a balance transfer facility is the low (and occasionally zero) interest rate offered for a specific term, for example, 6 months or 12 months.

The good news for consumers is that banks are aggressively competing for credit card business. The outcome is that banks are offering excellent deals at a time when credit costs are very high.

There are more ‘zero interest' cards on offer today than at any time before and although some of these have conditions attached, many balance transfer cards offers are exceptional and can save thousands of dollars a year for cardholder. With the average credit card in Australia now carrying more than $3,000 balance, it is little wonder the banks are offering incentives for you to transfer your account to them.

Australian financial institutions offer you anywhere from a zero interest rate on your debt for the duration of your debt, to a small credit charge for a 6 month period. For example, you could be paying off $100 per month on your card today with $80 being taken off the principal and $20 worth of interest. By transferring your debt to another financial institution you can pay the whole amount off your debt, there is no interest to pay. This could save you more than $200 a year on a balance of $3,000.

Balance transfer credit cards have become an excellent means of credit card debt reduction due to how easy it is to consolidate multiple credit card debts on them. As balance transfer credit cards normally only allow balances to be transferred with application, it is quite a straightforward process that can stop debt from building up over many months.

Many balance transfer credit cards offer a lower than usual rate for a long period of time, but there are also quite a few which provide an interest free period for transferred balances that can last for as long as six months. For credit card users who are prepared to spend a small period of time dedicated to reducing their credit card debt this can be a tool that saves you hundreds of dollars a year.

Transfer your Credit Card Balance to a low rate card

Why pay 20% or more on your credit card debt when you can transfer the debt over to another card? It makes sense to take advantage of balance transfer credit cards and our top three picks are below.