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How do balance transfers work?

Moving your balance to a card with a lower rate can sometimes be a smart way to reduce your interest payments if you feel your credit card balance is getting a little out of hand.

But balance transfers aren't suitable for everyone and there are some things you should know about before you get started. Read on to see what a balance transfer could do for you… and what it can’t.

Balance transfers could help you…

  • Consolidate one or more credit or store card balances. Some cards let you transfer balances from up to 3 other cards, but there will always be a limit, so check before you apply.
  • Save on interest. Some cards even offer a 0% p.a. rate for a set term on the amount you transfer - often a period of months but sometimes years. Depending on your current balance and rate, this could potentially save you lots of money over several months.
  • Transfer up to 80% of the available credit limit on your new card. Keep in mind that you might not be eligible for the credit limit you request in your application.
  • Create an incentive to pay debt down. Interest-free and discount interest rate periods on balance transfer offers always end – and the end-date could be a good incentive to repay your balance as quickly as you can while you’re only paying low interest, or not paying interest on it at all.

Balance transfers can’t help you…

  • Get rid of interest altogether. After the balance transfer offer period ends, the low rate that applies to any remaining balance will revert to a higher rate – often the card’s variable interest rate on purchases or even the cash advance rate.
  • Close your old cards. A balance transfer can be a good a way to save on interest while you take control of your debt and pay your balance down. But you will still be responsible for closing your old cards, which might be a good idea so you aren’t tempted to use them.
  • Pay your balance down faster. When you transfer a balance to a new card, you will still only need to make the minimum repayment to keep the card. It’s up to you to make the most of the interest-free period to reduce the card balance by making extra repayments.

If you’d like to learn how a balance transfer works, read How to get started with a balance transfer.

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