Balance Transfer Credit Cards

Get up to 12 months at 0% interest with a $0 fee

Updated January 2018
TLDR Summary of Balance Transfer Credit Cards
  • Balance transfers can save hundreds if not thousands of dollars in fees and interest if used intellingently. 
  • You can't transfer debt to another card from the same bank. For example, if you have a BNZ credit card you will need to apply with other banks such as Westpac or ASB. 
  • If you've got credit card debt that's causing pain, a balance transfer may be right for you.
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Best Deals
Best Cashback offer - 0% for 12 months - Westpac Hotpoints MasterCard. 
Already a Westpac customer? You won't be eligible. Try the BNZ Low Rate Mastercard, also 0% for 12 months.
Best Free Fee Card, with a shorter interest free period - 0% for 6 months - ASB Visa Light
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Balance Transfer Cards - 0% Debt for up to 12 months
Credit card interest rates hover around 20% per annum, so transferring your balance can save you hundreds or thousands a year on existing credit card debt. Credit card balance transfers are new cards which you can apply for, and once approved, your existing debt from one card moves to the new card. You get a lower interest rate, meaning you can be free of debt faster.
 
This guide walks you through the process of moving your debts to balance transfer credit cards and compares the 0% offers and applicable fees.
 
What cards can I get a balance transfer on?
You can apply for a balance transfer with any Visa, MasterCard, American Express, GE CreditLine, Q Card, Farmers Card and/or most other store cards. Some banks may limit what other cards they will transfer. 

What is a Balance Transfer?

  • A balance transfer happens when you receive a new credit card which takes the balance from an existing card. In the process, you owe the new credit card the money, and the existing card is repaid.
  • The new credit card will have a low interest rate, often 0%. You may be charged a “transfer fee” or around 2%, but this is a one-off fee. You may also be charged an annual fee for the new card.  
  • With a balance transfer credit card, your interest rate is low or 0% for a set period of time. This lets you pay the debt off faster as you’re not paying interest on top. Balance transfer credit cards are a fast way to clear debts.
 
Picking the Best Balance Transfer Credit Card
  • The trick is to pick a card with a small transfer fee and a long low-interest rate period so that you maximize the savings available.
  • We recommend going for the longest low-interest rate period (i.e. 12 months vs 6) even if the transfer fee and/or annual fee is higher. Credit card interest is a killer, so locking in the balance interest free for longer is going to save a lot.
  • Most importantly, as the old card is now free of debt, we recommend to lower the credit limit so you can still use it but only for emergencies. It’s pointless to clear the balance only to build up new credit card debt afterwards!

The 9 Rules of Credit Card Balance Transfers

Before you apply for a balance transfer credit card, we have outlined 9 rules for doing it right. If you do it wrong you could be in a worse situation than before. 

Prioritise repaying the debt (unless you have more expensive debts somewhere else)

An interest-free debt is fairly rare, so you have the perfect conditions for repaying it. If the debt is $5,000, budgeting $500 a month will have it paid in less than 12 months. Calculate what you need to repay per month by taking the debt amount, and divide it by 12 (months). If it’s higher than you can afford, pay the maximum you can. 
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Meet the monthly minimum repayments

Your transfer may be low interest, but like any credit card you’ll need to make the minimum payments. If you don’t, you’ll be charged penalties. You should plan to pay more than the minimum unless you have more expensive debt to pay. 
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Don’t use the card for purchases, and don’t withdraw money on it

You will be hit with the full interest cost of the purchases if you can’t pay the bill, as the low interest offer only applies to the transferred balance. 
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Get a low interest credit card if you need to spend

Avoid the pricy interest rates everyone else offers and get an offer that helps your finances. Currently there are only two, the AMEX Airpoints card offering a 0% interest rate for six months and the AMEX Low Rate, offering an interest rate of 2.99% per annum for six months.
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A balance transfer card offering a “life of the balance” interest rate is worth considering

Some banks offer 0% for a number of months, then around 6% for the life of the balance until it’s paid off. If you expect to have around $1,000 - $2,000 owing at the end of the interest free balance, paying $60-$120 a year on interest may suit your needs for the convenience. It also means you can avoid applying for another balance transfer credit card and protect your credit score by doing so. 
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If you have balance owing after the low-interest period, apply for another balance transfer credit card

​If you don’t, the remaining balance will be hit with 20%+ interest rates in most circumstances. That’s an interest cost of $100 a month on a $6,000 balance. You can transfer all of that to a new card for 12 months interest-free and paying a small fee for the new card.
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You can’t apply for a balance transfer with your own bank

For example, if you have a Visa with ANZ and see an ANZ offer for a balance transfer, you will not be able to apply as banks limit the offer to new customers only.
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You can usually get a balance transfer of up to 90-95% of your approved credit limit

This means that if you apply for a balance transfer credit card and get a $5,000 limit, you will be able to transfer around $4,500 to $4,750. 
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If you have a bad credit score, getting a balance transfer may be more difficult

The key to a good deal is having strong credit; evidence of defaults or late payments will raise red flags for banks who may refuse to accept your application. If you are refused, we recommend contacting your existing bank and asking them about any promotions available. If they have a low interest option, you can ask to switch to that. You probably will skip most of the credit checks as you have an existing relationship with the bank. 

Best Buy 0% Balance Transfer Credit Cards

Best Cashback offer - 0% for 12 months - Westpac Hotpoints MasterCard

Best credit card with 20,000 Hotpoint bonus, 0% interest for 12 months and a low "life of balance" interest rate thereafter.

​The deal:
  • Interest rate: 0% for 12 months, then 5.95% for the life of the balance
  • Annual fee: $44 (waived for the first year)
  • Balance transfer fee: none
  • Monthly payments: Must be above the monthly minimum (either 2% or $5 of the balance owing - whichever is greater)

What you need to know:
  1. You need to transfer a balance in the first 30 days to get the 0% interest period.
  2. You can't transfer a balance from another Westpac card.
  3. After the 0% ends, the interest increases to 5.95% on any remaining transferred debt until it’s paid off.
  4. Don't spend/withdraw cash on this card, the interest rate for new purchases is 13.45%​
  5. For more details or to apply, click here

Runner-Up Cashback offer - 0% for 12 months - Westpac Low Rate MasterCard Credit Card

The other best card on the market, identical with the Wesptac Hotpoints card with a waived annual fee.

​The deal:
  • Interest rate: 0% for 12 months, then 5.95% for the life of the balance
  • Annual fee: $65 (waived for the first year)
  • Balance transfer fee: none
  • Monthly payments: Must be above the monthly minimum (either 2% or $5 of the balance owing - whichever is greater)

What you need to know:
  1. You need to transfer a balance in the first 30 days to get the 0% interest period.
  2. You can't transfer a balance from another Westpac card.
  3. After the 0% ends, the interest increases to 5.95% on any remaining transferred debt until it’s paid off.
  4. Don't spend/withdraw cash on this card, the interest rate for new purchases is 13.45%
  5. For more details or to apply, click here

Worth Considering - 0% for 12 months - BNZ Low Rate Mastercard

The BNZ has a good offer with 12 months interest-free and a low-ish annual fee.

The deal:
  • Interest rate: 0% for 12 months, then 13.45% on the remaining balance and new purchases
  • Annual fee: $60
  • Balance transfer fee: none
  • Monthly payments: Must be above the monthly minimum (either 2% or $5 of the balance owing - whichever is greater)

What you need to know:
  1. You need to transfer a balance in the first 30 days to get the 0% interest period.
  2. You can't transfer a balance from another BNZ card.
  3. After the 0% ends, it's 13.45% interest on any remaining transferred debt until it’s paid off.
  4. Don't spend/withdraw cash on this card, the interest rate for new purchases is 13.45%
  5. For more details or to apply, click here

Best Free Fee Card - 0% for 6 months - ASB Visa Light

The ASB offers an attractive balance transfer for short term debt with no fee

​The deal:
  • Interest rate: 0% for 6 months, then 13.50% afterwards
  • Annual fee: $0
  • Balance transfer fee: none
  • Monthly payments: Must be above the monthly minimum (either 2% or $5 of the balance owing - whichever is greater)

​What you need to know:
  1. You need to transfer a balance in the first 30 days to get the 0% interest period.
  2. You can't transfer a balance from another ASB card.
  3. After the 0% ends, it's 13.50% interest on any remaining transferred debt until it’s paid off.
  4. Don't spend/withdraw cash on this card, the interest rate for new purchases is 13.50%
  5. For more details or to apply, click here. 

Balance Transfers Best Practice

  • ​If you can pay off the debt balance you have transferred faster than the 0% interest period finishes, you'll slash the costs of your debt. Pick the card that offers the longest interest-free period and lowest fee.
  • Don't add new debt to the credit card balance - this will defeat the purpose of the balance transfer.