A Balance Transfer involves transferring the balance(s) on your other credit cards or loans to a Card Services Credit Card at a promotional rate for a set period of time. It can be a great way to save on Interest Charges.
Once your balance has been transferred, be sure to close your old credit card account as this will not occur automatically.
A Balance Transfer let's you:
- Use up to 80% of your Card Services Credit Card limit to pay down your balances on other credit cards or loans
- Take advantage of a lower interest rate for the promotional period of the balance transfer
- Use the benefits from the lower rate to increase your credit card repayments in order to pay down your Balance Transfer prior to the offer reverting to the Cash Advance rate at the end of the promotional period.
Whilst taking advantage of the above points, you should remember that no interest free days are applicable to retail purchases when you have a balance transfer. This means any additional purchases will be charged interest at the Annual Percentage Rate for retail purchases.
To get the most out of your Balance Transfer it is important that you follow the below recommendations:
- Make additional payments (more than the Minimum Payment Due) throughout the promotional period to reduce the amount you owe
- Ensure you pay the outstanding balance prior to the end of the Balance Transfer offer. Any outstanding balances that were transferred will revert to the Cash Advance Rate at the end of the promotional period
- Track any additional spending on the credit card as it will incur the applicable purchase interest rate
- Close other credit cards and loan accounts once they have been repaid. The benefits of doing this are discussed in the question below.
Some of the benefits from closing your other credit cards and loans are:
- Help reduce the total amount of credit card and loan annual fees you pay
- Simplify your finances and decrease the number of cards you hold
- Prevent you from accruing additional debt, by decreasing the available credit options
- Help prevent increases in your monthly debt obligations
- Reduce the amount of credit recorded against your credit bureau record.
Once a Balance Transfer is processed on your Card Services Credit Card, the interest charges will be as follows:
- During the promotional period, balances transferred across will be charged an interest rate as per the Balance Transfer offer you accepted
- There will be no interest free days, this means all retail purchases will be charged interest at the applicable annual percentage rate
- Any transferred balances that remain outstanding at the end of the promotional period, will revert to the cash advance rate.
For example, if your Balance Transfer rate is 0 % p.a. for 12 months, during the 12 months all additional purchases will be charged interest at the Annual Percentage Rate and at the end of the 12 months, any outstanding balances from the Balance Transfer will revert to the Cash Advance Rate. The additional purchases made throughout the promotional period will remain at the applicable Annual Percentage Rate.
We will apply payments firstly to:
- Fixed Payment Option's Monthly Instalment(s) due in the current Statement Period (if applicable); and then
- to the portion of the Closing Balance of your most recent statement which attracts the highest interest rate; and then
- to the portion of your balance which attracts the next highest interest rate;
- and so on.
Payments are then applied to balances that have not yet been billed on your statement in a similar fashion.
A Balance Transfer fee can be applicable on some promotional offers. This fee is calculated as a percentage of the total amount being transferred and is added to the Balance Transfer amount.
For example, Balance Transfer amount of $10,000 with a 2% Balance Transfer Fee, results in the outstanding balance of your credit card to increase by $10,200 of which $200 is the Balance Transfer Fee.
At the end of the balance transfer period, the interest rate on any outstanding transferred balance and balance transfer fee will revert to the variable Annual Percentage Rate for Cash Advances.