A popular way for a credit card provider to entice new customers is with a balance transfer offer. It’s no doubt an eye-catching promotion and very attractive to a customer.  The balance transfer interest rates in the market start from 0% and can continue at this rate for sometimes up to 26 months or more. 

When searching the best balance transfer offer for you, make sure you at least do the following 4 key checks described below.

 

1. Balance Transfer Fee

When requesting to transfer over a spending balance, most providers charge a one time upfront cost, known as a balance transfer fee. This fee is shown as a rate and it typically ranges between 0% to 3% of the amount being transferred over. 

 

 

2. Annual Fee

As with all credit cards, the annual fee amount needs to be considered, before a choice is made. Some balance transfer offers have great low rates but can sometimes be paired with a high annual fee. So make sure to weigh out the annual fee of the offer and compare it against other offers.  

 

3. Reverted Interest Rate

The reverted interest is the rate applied to a transferred balance that still remains after the promotion period ends. This rate is usually set at the cash advance rate, which is typically 21.99% p.a.

If you pay your balance transfer off in full before the period ends, then that's awesome! But if you don't pay it all off, then do try to contact your bank and find a lower interest rate product option. 

 

Higher Interest Rates Roadsign

 

4. Check The Late Payment Clause

A strict condition with balance transfers is that the credit card owner must pay at least the minimum payment each month. If you're someone who tends to miss your credit card repayments, then you could risk losing the promotional balance transfer rate.

If a payment is missed, credit card providers can remove the promotional rate and replace it with the cash advance rate usually around 21.99% p.a. Before accepting a balance transfer offer first do make sure you're fully committed to making payments on time each month. Look into setting up a direct debit payment to help. 

 

 

Check out the best balance transfer credit cards in Australia.