0% Credit Card Balance Transfers

Slash your credit card debt using interest free deals

Article updated weekly - last updated on Friday 5 March 2010

Do you have current credit card debt? By moving this debt using credit card 0% balance transfer offers, you can save yourself hundreds or even thousands of dollars.

This is a step-by-step guide on using '0% balance transfers' and 'low interest' offers (e.g. 2.99% for 12 months) to save you big dollars on your credit card interest. We explain how to avoid the pitfalls when you use these 'special offers' and show you the current offers for 0% or low interest credit cards in Australia (updated weekly).

Warning 1 – What’s in it for the credit card company? Warning 2 – Don't use the card for any purchases! Credit card rotation - using interest free credit cards to your advantage – the step-by-step guide Your credit rating Current 0% interest rate balance transfer credit card deals (updated 05 March 2010) Current 9 months and one year balance transfer credit card deals Current LIFETIME balance transfer credit cards

0% & Low Rate Balance Transfers

Credit card providers offer 0% balance transfers or low interest rate offers to attract new customers and to get you to transfer your credit card debt to them. They hope that, by the time the initial 0% interest free period offer ends (generally 6 months later), you’ll accept the new high rate of interest - often at 15-20%. That’s how they’ll make lots of money out of you!

Hence only use these 0% balance transfer offers/low interest rate deals if you are disciplined enough to move your money when the initial interest free period ends, or you can pay off the entire credit card debt. Otherwise you should consider getting a 'lifetime' balance transfer - see below for rates as low as 3.9% p.a.

While you are on a 0% interest free period for 6 months, if you purchase something on the card, that purchase is charged at a higher rate. ‘No problem,’ we hear you say, ‘I’ll just pay that purchase off straight away.’ WRONG – any repayments you make will go only to reduce the balance of the 0% interest portion first.

So if you do move your debt to a 0% interest rate card, NEVER, EVER use this card for any purchases. Consider using another card for your day-to-day purchases instead.

Don’t be scared off by the warnings above – as long as you understand how the interest free period works, you can use these cards to potentially save you hundreds of dollars if you use the following method:

1) Choose a card
Firstly you need to find a new card that offers you an interest free period or a long term, low rate of interest. See our current offers section at the bottom of the article for 0% interest rate balance transfers and special offers on low interest cards.

2) Ensure you make the monthly repayments
You should ensure you make at least the minimum repayments to avoid being charged a penalty fee, or worse still, having the 0% deal cancelled meaning you need to pay the new expensive standard rate.
Consider setting up a direct debit for the minimum payment - most credit cards offer this option. Ask them when you sign up.

3) Move or repay the debt before the 0% interest/low interest rate ends
This requires discipline. 6 months fly by and before you know it you’re paying an expensive rate. Put a reminder in your mobile phone or diary 6 weeks before the deal ends and act on it!
Unless you move the debt before the 0% period ends, it only takes a few months before all the gain is lost! If you think you'll forget, consider a long term low-interest rate card instead.

4) Don’t forget the account fees
Unfortunately some cards charge you an annual account fee. Therefore, if you do pay an annual fee, check that the savings you make from the 0% interest switch are greater than the annual fee, or it’s not worth it!

If you do decide to move your debts around using the above card rotation method, you’ll need to have a fairly good credit score. Also be aware that if you are applying for multiple lines of credit over a short period of time, this can affect your credit rating score. However applying for a new credit card every few months will generally not cause you any issues - see our Credit Ratings Article for more information.

Remember to cancel old credit cards

If you’ve regularly made balance transfers before, you may already have cards from the top providers. It’s worthwhile cancelling the cards that you don’t need, as many credit card providers will reject you for one of their new offers if you currently hold a card with them, or have done in the last 12-18 months.

This section is verified and updated weekly (last updated Friday 5 March 2010), or sooner if we hear of a better deal. The research is completely independent and our sole aim is to find the best prices and deals in Australia (click here for more details on our honest & independent research promise).

The following table shows the current 0% interest rate balance transfer credit cards. These cards have been chosen based on providing an interest free period for 6 months or more, followed by cheapest annual fee:

Unfortunately interest free periods rarely last more than 6 months. If you're looking for a longer period of low interest then consider the following 9 month, 12 month and lifetime balance transfer offers:

Here's the current Australian credit cards with lifetime balance transfers:

Looking for other 0% credit card deals?

Try a Google or Yahoo search on "0% balance transfers". From time to time we've found banks advertising 0% special deals on search engines that are not available on their main sites.

Junk mail

Keep an eye out for junk mail. Some credit card providers offer special deals through this annoying, but sometimes useful, source. We recently saw a Bankwest balance transfer offer for 1.99% for 15 months on their Bankwest Lite MasterCard.

Further information and links

If card rotation isn’t for you, please read our Low Interest Rate and No Annual Fee Credit Card Article.

Want to comment on the above article? Any stories or experiences (good or bad) about card providers that you'd like to share? Have you got any other money saving tips? Please share them on our Forum.

Important disclaimer: The above information is carried out using independent journalistic website and our recommendations are general in nature. MoneySavingMaster.com.au is passionate about helping you find the best deals but we can’t take everybody’s individual circumstances into consideration. If you visit any of the above sites please ensure that you read and fully understand all the product details and conditions, including any product disclosure statements, before you sign up for any product or service. Consult a licensed financial services provider if you require advice about your specific needs.

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