When you compare balance transfer credit cards it is important to keep the key points in mind to make the most of your choice. Once you understand the advantages and disadvantages of certain cards you can choose with more confidence.
If you currently pay credit card debt on a credit card with regular interest rate you could be better off applying for a low rate balance transfer card instead. Comparing these cards can be confusing because you hardly know what all the mumbo-jumbo speak means.
Comparing balance transfer cards know-how:
The following check list of questions will help you select the right low rate balance transfer card for your needs.
What is the right rate for me? Choosing the right rate is simply a matter of looking at the size of your debt and the promotional period attached to the card in question.
Generally speaking, the lower the rate, the shorter the promotional period. Balance transfer card rates range from 0% p.a. to about 9.99%.
The good news is that in Australia you have a pretty competitive market, so there will always be good deals around to keep your eyes peeled for.
How long does the promo run for? If you are given 6 months with a 0% p.a. interest rate you effectively have 6 months to pay off your debt in full. Given the fact that you could end up tarting your way to being debt-free I suggest you give it your all within that time to pay off your debt once and for all.
Not doing so could see you in deeper financial trouble than ever before.
How much is the annual card fee? When comparing balance transfer cards it pays to also compare the annual card fee as in some instances a higher fee could sting you more than a higher interest rate.
Cards such as the Commonwealth Low Fee Card (for existing customers), the HSBC Credit Card, the BankWest Zero Platinum MasterCard and the Woolworths Everyday Money Card (for the first year anyway), are currently offered with a $0 annual fee.
What is a balance transfer window? The balance transfer window is the time limit applied to your balance transfer from the moment your card has been approved. Please read the small print before you find out that you missed out on the deal.
Does the balance transfer apply to new purchases as well? No! The balance transfer applies to ONLY the monies transferred from the old card. New purchases are not included in the offer. Neither are cash transactions made with your new card.
How will the payments be charged? Also called allocation of payments, or the adverse order of payments this refers to how your card company charges your repayments to repay the debt.
The lowest debt is usually cleared out first which means if you have a 0% p.a. balance transfer card, make new purchases on the card at $15.99% p.a. and draw some cash advances at 19.99% p.a. the 0% balance will be paid down first.
Only when that debt is paid in full will you be able to pay down the next lowest debt (in this instance your new purchases), followed by the cash advance debt.
As you can see, any additional debts you incur will hike your debt right into the stratosphere. The best way to avoid all of this is by not using your new balance transfer card for anything else than its primary function – to transfer your balances for a lower interest fee.
How much do I have to repay each month? You will still need to repay your minimum payments. These depend on the size of your debt and the card you use.
Please also note that same bank transfers are not allowed. Meaning, if you currently bank with ANZ you cannot apply for a balance transfer card with that bank.
Australian low rate balance transfer cards:
- HSBC Credit Card – 0% p.a. for 8 months with 2% handling fee on balance transfers
- St George Vertigo MasterCard – 0.99% p.a. for 6 months on balance transfers
- Woolworths Everyday Money Credit Card – 5.99% p.a. for 6 months on balance transfers
- Aussie MasterCard – 4.99% p.a. for 9 months on balance transfers and 9.99% p.a. for 12 months (reverts to 13.29% p.a.) on purchases
- Citibank Clear Platinum – 0% p.a. for 12 months with 3% handling fee on balance transfers
- ANZ Low Rate MasterCard – 0% p.a. for 3 months on balance transfers
- Suncorp Platinum Credit Card – 0% p.a. for 6 months on balance transfers
- Commonwealth Low Fee Card – 5.99% p.a. for 5 months on balance transfers
- ANZ Balance Visa – 0% p.a. for 6 months on balance transfers
- Citibank Silver – 6.9% p.a. for 6 months on balance transfers
- Citibank Platinum Credit Card – 0.9% p.a. for 15 months on balance transfers
Related posts:
- Comparing Low Rate Balance Transfer Offers
- What To Look For In A Low Rate Balance Transfer Credit Card
- How Low Interest Rate Balance Transfer Cards Work
- Low Interest Rate Balance Transfer Credit Cards And How They Work
- How To Use Low Rate Balance Transfer Credit Cards
- Low Rate Balance Transfer Credit Cards And What To Pay Attention To
- Using A Low Rate Balance Transfer Credit Card Properly
- A Good Low Balance Transfer Credit Card
- Comparing Balance Transfer Credit Card Offers
Posted on Tuesday, April 6th, 2010 at 1:04 pm
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