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5 questions to ask before a balance transfer

A balance transfer involves moving your balance from one credit card to another, often to take advantage of a lower promotional interest rate.

While a balance transfer can be a simple and smart way to save on interest, there are some things you should be aware of before you apply. Here are five questions to ask before you get started.

1. Which rate will apply after the offer?

While balance transfer offer rates can be low and sometimes even 0% p.a., they only last for a limited time – usually a number of months. It’s important to know when the offer ends and what the rate reverts to after that. You should also be aware of the annual card fee and factor it into the equation before going ahead with your balance transfer.

2. Is there a balance transfer fee?

Be aware that you may need to pay a one-off balance transfer fee when you transfer your balance from your old card to your new card. This is often a percentage of the amount transferred – for instance, if the fee is 1.5% of the balance transferred and you transfer $5,000, you’ll pay $75.

3. What’s your credit limit?

Your new credit card will come with a credit limit. The amount of money you can transfer across to your card will normally be a percentage of this credit limit.

4. Will you cancel your other credit cards?

A balance transfer offer could be a way to give yourself a head start in paying down your debt while you’re not being charged interest. But it’s important to think about what you’ll do with your existing cards. If you continue to use them, you risk getting further into debt. You should close them after the balance has been transferred.

5. Will you make purchases on the new card?

Remember, the balance transfer rate doesn’t apply to new purchases or cash advances, so make sure you know what the interest rates are.

If you're ready to get started, have a look at the balance transfer offer.

If you’d like to learn more, read how to make the most of a balance transfer offer.

Things you should know

Credit criteria, fees and charges apply. Terms and conditions available on request. Switches, upgrades or customers accessing employee benefits are ineligible for balance transfer offers. Our balance transfer offers may be varied or withdrawn at any time and are not available in conjunction with any other promotion.