That’s a lot of debt! And Australian’s aren’t exactly disciplined borrowers. 

Credit cards can be beneficial when used in the right way, but some people can find themselves in a debt spiral when interest rates kick in and payments start skyrocketing. If you’re part of that group, 0% balance transfers could offer a way to catch a break. 

Read on for a break down of how credit card balance transfers work and discover ten 0% balance transfer offers on the market currently.

What is a credit card balance transfer?

A credit card balance transfer refers to the practice of moving all or some of your credit card debt from one card to another.

On a card with a balance transfer offer, the debt that’s been moved onto it will be subject to a lower interest rate, or in the case of this article, zero interest, for a period of time (known as the promotional or honeymoon period). In theory, this allows you to just pay off your debt, without incurring any interest, which gives you some breathing space if you’re in a hole. At the end of the period, any debt you haven’t paid off will be charged at a revert rate, which is typically a higher than normal rate. Furthermore, any purchases you make with the new card will incur interest, potentially rendering your whole debt recalibration exercise pointless. 

0% balance transfer offers available

Here’s a snapshot of ten credit cards currently offering 0% balance transfer periods of 12 months or longer:

Credit card

N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]301550021.49VisaMore details

St.George Bank Vertigo Visa (Balance Transfer Offer)

    N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]301550021.49MasterCardMore details

    Westpac Low Rate Card (Cashback offer)

      N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]2.95025100021.99MasterCardMore details

      Bankwest Zero Classic Mastercard

        N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]3.4012.550021.74MasterCardMore details

        Great Southern Bank Low Rate Credit Card

          N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]301550021.49VisaMore details

          BankSA Vertigo Visa (Balance Transfer Offer)

            N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]301550021.49VisaMore details

            Bank of Melbourne Vertigo Visa (Balance Transfer Offer)

              [Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer]0.66[PRICE_GUARANTEE, CONCIERGE, SPECIAL_EVENTS, ]3.3030600020.99VisaMore details

              Virgin Money Virgin Australia Velocity Flyer Card (Balance Transfer Offer)

                [Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer]0.5[FREE_DOMESTIC_TRAVEL_INSURANCE, INTERNATIONAL_TRAVEL_INSURANCE, FREE_SUPPLEMENTARY_CARDS, EXTENDED_WARRANTY, RENTAL_CAR_EXCESS_INSURANCE, CONCIERGE, PURCHASE_PROTECTION_INSURANCE, ]3015600021.49MasterCardMore details

                Westpac Altitude Platinum (Altitude Velocity)

                  [BOQ Q Rewards, BOQ Q Rewards]1[PRICE_GUARANTEE, PURCHASE_PROTECTION_INSURANCE, ]3.41510200021.74VisaMore details

                  BOQ Blue Visa

                    N/A$product[$field["value"]][FREE_DOMESTIC_TRAVEL_INSURANCE, FREE_SUPPLEMENTARY_CARDS, PARTNER_DISCOUNTS, ]0030100025.99VisaMore details

                    HSBC Low Rate Credit Card

                      [Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer, Velocity Frequent Flyer]0.66[PRICE_GUARANTEE, CONCIERGE, SPECIAL_EVENTS, ]3.33930600020.99VisaMore details

                      Virgin Money Virgin Australia Velocity Flyer Card (Points Offer)

                        [Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer, Qantas Frequent Flyer]1.5[FREE_DOMESTIC_TRAVEL_INSURANCE, INTERNATIONAL_TRAVEL_INSURANCE, CONCIERGE, AIRPORT_LOUNGE, FRAUD_PROTECTION, ]35030600021.99MasterCardMore details

                        Qantas Money Qantas Premier Platinum

                          N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]2.95025100021.99MasterCardMore details

                          Bankwest Breeze Classic Mastercard

                            [Citi Rewards Program, Citi Rewards Program]1[INTERNATIONAL_TRAVEL_INSURANCE, PRICE_GUARANTEE, EXTENDED_WARRANTY, CONCIERGE, SPECIAL_EVENTS, PARTNER_DISCOUNTS, PURCHASE_PROTECTION_INSURANCE, ]3.49030200022.24VisaMore details

                            Citi Rewards (Bonus Points)

                              [Citi Rewards Program, Citi Rewards Program]1[INTERNATIONAL_TRAVEL_INSURANCE, PRICE_GUARANTEE, EXTENDED_WARRANTY, CONCIERGE, SPECIAL_EVENTS, PARTNER_DISCOUNTS, PURCHASE_PROTECTION_INSURANCE, ]3.49030200022.24MasterCardMore details

                              Citi Citi Rewards (Purchases and Balance Transfer Offer)

                                N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]3020100011.8VisaMore details

                                Heritage Bank Gold Low Rate

                                  N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]3.6508100012.49VisaMore details

                                  QBANK Bluey Card

                                    []2[FRAUD_PROTECTION, ]3.4$product[$field["value"]]30600021.74VisaMore details

                                    Kogan Money Black Card

                                      N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, ]3025100012.49VisaMore details

                                      Beyond Bank Low Rate Visa Credit Card

                                        [flybuys, flybuys]0.5[]2.5030100019.99MasterCardMore details

                                        Coles No Annual Fee Mastercard

                                          Important Information and Comparison Rate Warning

                                          All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of February 28, 2024. View disclaimer.

                                          Information correct as of 8 March 2021. Based on a $2,000 spend per month.

                                          How to compare balance transfer credit cards

                                          We’ve focused on some of the longest balance transfer periods for this article, however, there are a number of features besides this that you should compare to understand whether a card is right for you.

                                          Here’s a list of everything you should compare before making a decision: 

                                          1. Length of promotional period

                                          We’ve covered this already and for good reason. The promotional period is what makes balance transfers attractive, so the longer you can have interest free debt, the better. It’s rarely cheap to have debt, so any time you can have it for free is golden.

                                          2. Balance transfer rate

                                          This article focuses on 0% balance transfers, however, there are other cards on the market which do charge an interest rate on balance transfers, but these are generally below 5%. Obviously the lower the interest rate, the more you save, so you may want to look for a 0% rate for the best value. 

                                          3. Balance transfer fee

                                          balance transfer fee is a percentage-based fee charged when you transfer your existing debt to a new card. The fee is typically 1-3% of the balance transfer amount. So for example, if you’re transferring $10,000 and are charged a 2% balance transfer fee, the new debt on the card will be $10,200 (2% of $10,000 equals $200 which is the fee, plus the balance transfer amount). 

                                          4. Purchase rate

                                          It’s generally not advised to use your new credit card for purchases, as it makes the whole balance transfer effort a bit pointless. However, if you do expect to make some purchases with it, make sure you’re getting a low rate; you don’t want to be paying through the nose on interest in your supposedly interest-free period. 

                                          5. Revert rate 

                                          The revert rate is what the debt on your card will be charged at, should you still have any at the end of the promotional period. It’s generally higher than the purchase rate – double it in some cases. Aim to pay off your debt before you have to encounter this rate. 

                                          6. Annual fees

                                          Annual fees on balance transfers can range from nil to $400. It’s easy to forget you have to pay to use the credit card, especially if you’re caught up with low rates and long balance periods. But if you’ve got a 24-month promotional period with an annual fee of $400, that could negate your savvy interest-free efforts. 

                                          7. Debts eligible for transfer

                                          Different credit providers have different debts that are eligible for balance transfer. Typically you can transfer one or multiple debts from Australian credit card accounts, while in some cases you can transfer debts from personal loans and lines of credit. 

                                          8. Balance transfer limits

                                          Some cards will have a balance transfer limit, so you’ll only be able to transfer a percentage of your debt to the new card, which is typically between 70% and 100%. To put this into real terms, if your new card has a credit limit of $10,000, a balance transfer limit of 80% and you have $12,000 worth of debt you want to transfer, you would only be able to transfer $8,000 from your old account. The remaining $4,000 would stay put in your old account, attracting interest. 

                                          How to do a credit card balance transfer

                                          Completing a balance transfer is typically a pretty simple affair. If you think they’ll work for you, here’s a five-step guideline to walk you through the process:

                                          1. Compare balance transfer offers: find an offer and card that works best for you, based on the features above. Have a clear idea of your financial situation before doing so, the minimum balance transfer period you want and what features are important to you. 
                                          2. Check how much you owe to your current provider: Have a look yourself or contact your existing credit card provider to see how much you currently owe. It’s also worth contacting them to figure out what charges you’ll cop, prior to leaving for your new provider. 
                                          3. Submit your application: Applications will typically be online, via the credit provider’s website. Have all of the details of your current card, as well as how much debt you want to transfer across. 
                                          4. Activate your card: Upon approval, you’ll need to activate your new card; the balance transfer won’t occur until you’ve done so. You can do this online or over the phone. 
                                          5. Close your old account: It can take up to two weeks for the balance transfer to show up on your new credit card. Once this has processed contact your old provider to cancel your previous card to avoid incurring any fees. 

                                          What not to do when it comes to balance transfers

                                          Balance transfers are often criticised for being a debt trap for consumers. ASIC investigated this claim in a 2018 report and found that only approximately 8% of people who transferred balances completely paid off their debt. More worryingly, over a third (31.6%) of consumers increased their total debt by 10%, with 15.7% increasing their debt by 50% or more. Furthermore, 63% of consumers who transferred balances did not cancel any of their other credit cards. This group were more likely to increase their total debt during the promotional period. 

                                          In theory, balance transfers are a great tool to get ahead of your debt. In reality, they can be a debt trap for many. 

                                          Here are some tips to be on the right side of the statistics:

                                          Don’t make new purchases with your card

                                          We have mentioned this but it’s vitally important; the whole point of a balance transfer is to stop paying interest on your debt, pay off the balance and then (hopefully) be debt-free. Making purchases with your new card means you’ll start paying interest on this new debt. Furthermore, credit providers allocate repayments to the debt which is charged at the highest rate. So if you made a new purchase at an interest rate of 20.99% and your balance transfer has a 0% interest rate, your repayments will go towards the new purchases first. And you don’t get interest-free days on purchases when you have debt from a balance transfer. 

                                          0% interest doesn’t mean zero repayments

                                          An interest-free period doesn’t mean you don’t have to make repayments; you still have to make the minimum monthly repayment. Your credit provider will have words to the effect of “5% of outstanding balance or $50, whichever is greater”, somewhere in the key facts sheet, with the values differing between providers.

                                          Don’t just make the minimum repayment

                                          When it comes to things like home loans and car loans, making the minimum repayment is standard practice. But only making the minimum repayment on your balance transfer will see you stuck with the debt for years, long after your promotional period has expired. Get ahead of the curve and pay off your balance before the promotional period ends and make the most of interest-free debt while you can. 

                                          Close your old card

                                          Not closing your old credit card leaves you open to potentially using it as well as your new one, fees and charges and being more likely to increase your debt during your balance transfer promotional period. Contact your former provider, ensure all of your debt has been transferred or period and move any regular payments to another account. 

                                          Why do credit providers offer balance transfers?

                                          It might seem like a strange concept to some that credit providers would offer their products interest-free for an extended period of time; how are they making money?!

                                          The unfortunate fact is that credit providers are well aware that a lot of us are bad borrowers. Many of us won’t pay off our balance transfer before the promotional period, so when the debt is charged at the revert rate, which often exceeds 20%, the provider can make thousands. There’ll also be some of us who make new purchases, again resulting in more interest charges. On a more optimistic note, people don’t like change, so providers offer balance transfers as a way of getting people to switch to their products and garnering more business. 

                                          Savings.com.au’s two cents 

                                          In theory, balance transfers are a rare opportunity to have interest-free debt, organise your finances and get yourself out of a hole. In reality, they can put consumers in real danger of having their debt spiral out of control. 

                                          If you don’t think you can pay off the balance transfer before the promotional period ends, you should ask yourself if it’s really worth going through with. The best way to handle credit card debt is to pay it off before it incurs any interest at all.

                                          Photo by Tim Mossholder on Unsplash