In theory, balance transfers seem like a great idea for the debt-laden Australian. Why pay exorbitant interest charges on your current credit card debt when you can transfer it to a new one and pay little to no interest for several months?

And in theory, balance transfers are a good idea. Paying 17% interest on a $5,000 credit card debt could cost you nearly $1,000 in interest if paid off over two years, but by transferring this debt to a card offering a 0% balance transfer period of 24-months, you could save yourself from paying any interest, if done correctly.

Yet for many, balance transfers don’t work out, with a large chunk of people actually increasing their debts, hardly ideal since a balance transfer is supposed to help users eliminate it.

There are a few reasons why this happens. One major culprit is the revert interest rate.

Compare low credit card revert rates

The table below shows a snapshot of credit cards with some of the lowest balance transfer revert rates available. 

Credit card

[HSBC Rewards Plus Program, HSBC Rewards Plus Program]1.5[FREE_DOMESTIC_TRAVEL_INSURANCE, INTERNATIONAL_TRAVEL_INSURANCE, FREE_SUPPLEMENTARY_CARDS, PRICE_GUARANTEE, EXTENDED_WARRANTY, RENTAL_CAR_EXCESS_INSURANCE, CONCIERGE, PARTNER_DISCOUNTS, AIRPORT_LOUNGE, PURCHASE_PROTECTION_INSURANCE, ]3030600021.99VisaMore details

HSBC Platinum Credit Card (Balance Transfer Offer)

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

    Kogan Money Black Card

      N/A$product[$field["value"]][]302010009.95VisaMore details

      Greater Bank Visa Credit Card

        N/A$product[$field["value"]][FREE_SUPPLEMENTARY_CARDS, PARTNER_DISCOUNTS, PURCHASE_PROTECTION_INSURANCE, ]302050010.99VisaMore details

        Auswide Bank Low Rate Visa Card

          N/A$product[$field["value"]][]3$product[$field["value"]]2010008.99VisaMore details

          Defence Bank Foundation Visa Card

            N/A$product[$field["value"]][]302510008.99VisaMore details

            Community First Bank Low Rate Credit Card

              N/A$product[$field["value"]][]0$product[$field["value"]]15100012.99VisaMore details

              MOVE Bank Low Rate Credit Card

                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 June 19, 2024. View disclaimer.

                What is a revert rate?

                The revert rate is the interest rate your card switches to after the initial introductory or honeymoon period ends. Revert rates are found on two types of cards:

                • Balance transfer cards
                • Cards with special introductory interest rates

                These rates are often referred to as ‘nosebleed’ rates due to how high they can be. While your average credit card interest rate tends to hover in the 17% p.a region, the average revert rate is closer to 20% p.a, climbing as high as 26% p.a! That’s definitely not something to be scoffed at, as these high revert rates can cause people a lot of trouble.

                On a balance transfer, you may have little to no interest charged on the transferred amount for a limited period of time (between three and 26 months) during which you’d attempt to pay off all of your debt. Once this period ends, the rate will revert to its higher nosebleed interest rate, and any remaining balance left on the balance transfer card will be charged accordingly.

                How revert rates work: Timmy’s example


                revert rate case study

                Timmy comes across what seems like a great deal for a balance transfer – 0% p.a for 20 months! He figures that should be more than enough time to set his finances straight, as he’s got over $30,000 in credit card debt.

                When signing up for the offer, Timmy doesn’t notice that there’s a revert rate of 21% p.a once the 20 months is over. Over this period, Timmy only manages to pay off $20,000, so he has $10,000 left at the end.

                Even by continuing to make repayments of $1,000 per month, with an interest rate of 21% p.a Timmy would be hit by interest costs of $879. To avoid this interest, he should have been aware of this high revert rate and structured his repayments accordingly so there would be $0 left on the card by the end.


                An example of a credit card with an introductory purchase rate might be “0% interest for the first six months” before reverting to a higher interest rate. On such products, beware of spending more than you can afford to repay before the end of this introductory period, as the revert rate could pack a punch.

                By law, credit card providers need to make these revert rates clear to the consumer before they sign up, but it can be easy to be blinded by promotional offers. To save yourself from falling for any traps, read the fine print and have a good look over the product disclosure statement before you sign up to any deals, especially if they sound too good to be true.

                Compare 0% balance transfer offers

                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 June 19, 2024. View disclaimer.

                                                        Balance transfers don’t always work

                                                        ASIC reported in 2018 that 30% of balance transfer users ended up actually increasing their debts by 10% or more after transferring their debts. It also discovered the following shocking stats:

                                                        • 15.7% of customers increased their total debt by more than 50%
                                                        • 15.3% simply maintained their existing debt level 
                                                        • 63% of consumers did not cancel their existing credit card after taking out a balance transfer

                                                        How does this happen?

                                                        Well, the revert rate is a big factor for starters. People overestimate their ability to pay off their debt by the end of the promotional period, or simply don’t understand how they work. But revert rates aren’t the only thing causing customers to lose their ‘balance’.

                                                        We’ve written quite extensively about the traps of balance transfers here. But generally, two big ways people can get stung by a balance transfer are:

                                                        • Making purchases with the card
                                                        • Balance transfer fees

                                                        If you have a balance transferred debt on your credit card, it’s recommended you don’t make any purchases with it, because interest-free days may not apply, meaning any purchases could be charged the card’s standard interest rate immediately.

                                                        Also, some cards also charge a ‘loading fee’, also known as a balance transfer fee. This fee will usually be around 1-3% of the total balance being transferred and is exclusive of the annual fee which can also be in excess of $100. The larger the balance, the higher the balance transfer fee: a 2% fee on a $5,000 balance transfer is an extra $100 on top of the credit card’s annual fee.

                                                        So it’s more than just a high revert that can lead to you getting sprung, and there are some clear differences between the good balance transfer offers and the bad ones.

                                                        Source: The Checkout 

                                                        What to consider before getting a balance transfer

                                                        So besides looking at the balance transfer interest rate and the length of the period, you need to consider the revert rate, the purchase rate and any fees attached. According to SocietyOne in a survey of Australian balance transfer users, 65% did not know about revert rates, while 57% were unaware of both the interest charged on new spending and the balance transfer fee.

                                                        That disturbingly suggests that well over half of all balance transfer users are unaware of the true costs, leaving their financial security up to chance. It isn't just true for balance transfers either, as one in three credit card users don't even know their card's purchase rate!

                                                        Don’t leave your finances up to chance – compare various balance transfer offers on these fees and charges to find one that’s suitable for you. You could also consider something like a debt consolidation home or personal loan, which might be a better option. 

                                                        Savings.com.au’s two cents

                                                        Is there any purpose in paying excessive interest on a balance transfer? The answer is no – you’re trying to clear your debts, and paying upwards of 20% is always going to make this difficult.

                                                        Most balance transfer cards will have a high revert rate, but that doesn’t mean you have to pay it. If there’s $0 left on the card once your balance transfer period ends, then it won’t matter if that revert rate is 50% because it won’t affect you.

                                                        To make sure your transferred balance is properly paid off in time, analyse your budget to work out how much you could sensibly put towards your debt each week or month without having to deprive yourself of essential human needs. With that number, you can calculate how long it will take for the debt to be paid off, then look for a good value balance transfer offer that covers that length of time.

                                                        For example: to pay off a $5,000 debt before the end of an 18-month balance transfer, you’d need to make monthly repayments of $278. Could you afford that? 

                                                        Also consider cutting up your credit card(s) so you aren’t tempted to spend anything extra until the debt is clear. 

                                                        Photo via by rawpixel.com