Everything You Need to Know About 0% Balance Transfer Credit Cards - CompareMyRates.com.au


Everything You Need to Know About 0% Balance Transfer Credit Cards

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All credit cards come with fees, and those aren’t just limited to interest. Before moving your balance to a 0% balance transfer credit card, you should be aware of other fees you may be charged. The following are common:
  • Balance transfer fee. As mentioned above, you will likely be charged a balance transfer fee that is calculated as a percentage of the amount of debt you are transferring to your new 0% balance transfer credit card. This generally ranges from 1% to 3%, depending on your bank. You’ll find information on this fee on our 0% balance transfer credit card reviews and in the fine print when applying for a card.
  • The annual fee. Annual fees on credit cards can vary by a lot, since any credit card company can provide 0% balance transfer credit cards. You might consider looking for a card that has no yearly fees or a lower fee for the first year. Annual fees can range from $20 to $400 plus, so make sure to choose a card with a yearly fee you can afford.
  • Minimum repayments.Your new 0% balance transfer credit card won’t earn interest for the initial period, but you still have to pay a minimum portion of the debt you owe every credit card statement period. It’s helpful to calculate how much you will need to pay each month if you wish to pay off your debt before the no-interest period expires.
  • Interest charges for new purchases. Many people use their 0% balance transfer credit card only to repay debt, because you will still be charged interest if you use your card for purchases. Since purchases will have a higher interest rate than the debt you already owe, any repayments you make will go toward paying interest on your purchases rather than your debt. You might be better off using another card for purchases until your debt is paid.
  • Late payment fee. If you don’t make payments by the due date listed on your bank statement, you might have to pay late fees on your 0% balance transfer credit card. Certain credit card companies like American Express, CommBank, and Westpac charge late fees ranging from $9 to $30 per late payment.
To ensure that you’re not surprised by extra fees or charges on your new credit card account, you should always read the terms and conditions before applying for a new card.

How to apply for a 0% balance transfer offer

It’s easy and quick to apply for a 0% balance transfer credit card. Lots of people benefit from these cards each year — follow the steps below to get your own.

1. Check the amount of debt you owe

When comparing cards, it will be important to know how much money you owe and how quickly you can pay it off with a 0% balance transfer credit card. This will help you choose the right card for your budget.

2. Compare 0% balance transfer programs

Be a smart shopper — compare a variety of 0% balance transfer credit cards with different features, charges and fees, purchase rates, and no-interest periods. Our Balance Transfer Credit Card Comparison table can help you easily consider all of your options.
0% p.a. for 18 months on balance transfers, requested at card application
$0 annual fee in the first year and 0% p.a. interest for 3 months
$0 annual fee in the first year
Compare More Balance Transfer Credit Cards

3. Apply online

On the comparison table, simply click ‘Go to site’ to be transported to each credit card’s official application page.

4. Fill out the application form

To make your application process easier, make sure to have your personal information on hand before you apply for a 0% balance transfer credit card. This will include your full name and address, your date of birth, your passport number, and/or your driver’s licence number. You might also have to provide copies of important documents, depending on the credit card company’s requirements. When applying for a 0% balance transfer credit card, you will need to fill out a part of the application that asks for your current credit card account information. This will include the company, your account number, and the total debt you are hoping to transfer to your new card.

5. Submit the application

It should take no more than a minute for you to receive a response after submitting your application. At this point, the credit card company may request additional documentation. If you are approved, your balance transfer will be completed after you receive and activate your new 0% balance transfer credit card. 0 balance transfer credit cards

Mistakes to avoid when using 0% balance transfer credit cards

There are certain guidelines you should follow when using a 0% balance transfer credit card so you can save the most money possible. If you aren’t careful, a 0% balance transfer credit card can be similar in cost to other credit cards. Keep from making the following common mistakes:
  • Only making minimum repayments. You won’t erase your debt by only paying the minimum amount you’re required to pay each statement period, which is usually between 2% and 3% of your debt. Be aware of the no-interest period on your new 0% balance transfer credit card and tailor your payments to eliminate your debt as quickly and efficiently as possible.
  • Not paying off the debt you owe before the no-interest period ends. With 0% balance transfer credit cards, you will pay a higher balance transfer interest rate once your introductory zero-interest period is over. It’s especially important when using 0% balance transfer cards to try to pay your debt before this period concludes.
  • Using your card for new purchases. The no-interest period on a 0% balance transfer credit card does not apply to new purchases made on the card. Purchases you make with the card will instantly be charged a high rate of interest, which will get in the way of your ability to pay off your existing debt. If you wish to make purchases with your new card, think about applying for a  0% purchase credit card.
  • Not checking credit limit requirements. If your existing debt balance is higher than the credit limit on your new 0% balance transfer credit card, you won’t be able to transfer the full amount of your balance. For this reason, it’s important to find out the credit limit on a new card before applying and include this information in your consideration. Learn more about credit limits and balance transfers here.
  • Not paying down your debt during the balance transfer process. You might accumulate late payment charges if you don’t make the required payments on your new 0% balance transfer credit card. Before transferring your credit debt, you should double check that you’ve paid any outstanding payments due on the old card to avoid extra fees.
  • Applying for balance transfers too frequently. One way you’ll become less likely to be approved for credit cards is by applying for too many cards in too short a period. If you apply for a second 0% balance transfer credit card immediately after the no-interest period ends on your first one, for example, you will be a less attractive candidate for approval. Your credit file record shows how many cards you have applied to, and this information is only erased every five years.
Don’t fill out a 0% balance transfer credit card application without thoroughly reading the criteria for eligibility, making a plan to repay your debt, and avoiding these common missteps so you will have a better chance of being approved for a card that could help you become debt-free. Compare Best Balance Transfer Credit Cards  

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