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0% Balance Transfer for 6 Months Credit Card Offers
Credit cards with a 0% p.a. for 6 month balance transfer offer are one of the most appealing cards for credit card consolidation.
As these all offer the good balance transfer features, it boils down to what credit card you would prefer to own after the balance transfer offer has expired.
This is most commonly a factor of which provider you trust and would prefer to be a customer of, and the annual fee.
Remember not to make purchases on your card which has a transferred balance on it. The purchase will take priority in being paid off, effectively locking in your balance transfer amount and delaying your debt repayment. Use another line of credit if necessary.
Featured 0% Balance Transfer for 6 months Credit Card
Westpac Low Rate credit card offers a low rate on balance transfers for up to 6 months, a low interest rate to help you manage your credit card debt and a low annual fee.
- $45 annual fee
- 0% p.a. for 6 months (reverts to 13.49% p.a.) on purchases
- 0% p.a. for 6 months on balance transfers
- Cash Advance Rate of 21.49% p.a.
- 55 days interest free
If you're unfamiliar with the concept of a balance transfer but are keen on undertaking one, have a read of our balance transfer resources. Use our new credit card balance transfer calculator to find out how much you could save.
0% Balance Transfer for 6 months Credit Cards Comparison
12 Month Balance Transfer Credit Cards
Table of Contents: Guide to 0% for 6 Month Balance Transfers
- What Are 0% Balance Transfer Credit Cards?
- How To Compare 0% Balance Transfer Credit Cards
- How To Use a 0% Balance Transfer Credit Card
- A Quick Summary
What is a 0% Balance Transfer?
We know 0% balance transfer cards can save us money. How do they work, and is there anything we should be looking out for when comparing these cards? With credit card debt spiralling out of control, and personal finances tighter than they have ever been before, it is easy to see why some people are struggling to cope. Everyone is looking for ways to save money, and pay off their debts faster.
The banks have come up with the perfect product to address the problem of credit card debt. Of course the product is designed to make the bank a profit, however if used correctly a 0% balance transfer could be the key to getting rid of your credit card debt once and for all.
A balance transfer credit card is an account that allows to you transfer any outstanding credit card debts you hold, over to the new card. The advantage of doing this is that for a special promotional period you will not be charged any interest on that transferred balance. This means you will save vast amounts of money in interest charges, giving you breathing space to pay your debt off faster.
For example if you had a credit card debt of $1000 and were paying a standard rate of interest of 20% p.a, then over a period of 6 months you would be paying around $100 in interest. If however you transferred that $1000 balance over to a 0% balance transfer credit card with a promotional period of 6 months, you would pay $0 interest on the balance, saving you $100.
How Long Will I get The Special Rate?
Most balance transfer credit cards will charge the balance transfer rate during the intro period, and then will revert to the credit card's normal standard rate of interest. However, for some cards the interest rate will revert to the cash rate, which is typically higher than the standard rate of interest charged on purchases.
When you begin your search for a balance transfer card there are a few things you need to take into consideration. Do you plan to use the card to make any purchases? How quickly do you think you can pay off the debt in full? Are reward programs of major importance to you? You need to know the answer to these questions so that you can accurately compare the different deals available, and get a credit card that suits your budget, and spending habits.
Is There a Catch?
There are not really any catches, but there are certain things to take into account before you take on one of these balance transfer cards.
What is the standard rate of interest- Although you will be getting a very low rate of interest, you must remember it is only for a short period of time. After that the balance will be either be charged at the standard rate of interest or the cash rate. You need to compare these rates to make sure you find a lender with a rate that you are happy with.
What is the transfer fee?- Many card companies will charge you a "transfer fee" when you transfer your balance. This fee will normally be a percentage of your outstanding balance. In Australia, however, it is very uncommon for these fees to be charged although there are some instances where they do, so it's always helpful to check.
What is the annual fee?- Many credit cards charge some sort of annual fee for using the service. Depending on your lender, and the type of card, the annual fees can range from $0 right up to $200 and above. If you are looking at gold or platinum cards with reward schemes, the chances are you will pay a much higher fee. Have a look at the fees and benefits, and decide whether they are really worth the cost. If you do not need them, and will not use them then you are far better off finding a card with a cheaper annual fee.
What are the other fees involved?- Have a look to see if there are any late fees, management fees or any other hidden costs you may not have noticed. It is far better to find these out at the start, rather than getting a nasty surprise further down the line.
It is very important you are clear on your financial situation before taking on one of these cards. You need to understand what you want from your credit card in order to get the best from it. If you are trying to save money, and pay a debt off faster then you need to look more objectively at the fees, and costs involved with the card. You also need to follow certain strategies, like not spending any money on your balance transfer card, and overpaying when you can. If you are debt free and looking for a cost free loan, you need to be organised and ensure you know when your promotional period ends so you can pay off the balance before being hit with interest. These credit cards can be a really useful tool in our financial arsenal, as long as you plan ahead, and focus on your goal.
How to Compare 0% Balance Transfer Credit Cards
Balance transfer cards are great for people that are paying a high interest rate on their current credit card and carrying a large debt. When a balance is transferred over to a 0% balance transfer credit card, no interest is charged on the balance for as long as the promotional periods lasts. This gives you a chance to really get catch up on your debt without having to struggle from month to month to keep up with not only the payments, but with the added interest as well.
Getting a 0% balance transfer card allows you to knock huge chunks off your debt all at once. It is best to pay as much as you can on any payments to make sure that the debt gets paid off in time..
0% balance transfer deals are offered for a limited amount of time. Each card will have its own set time limit, but most will give you six months to get catch up on your debt. Once the promotional time period has expired, interest will be added to the balance if it has not been fully paid off. It is important to find out exactly what the interest rate will be once the introductory time has expired. If you're going to have to pay a 20% rate of interest after six months, and you don't feel that you can get your debt handled within this time frame, then you would be better off looking for a 12 month or longer balance transfer card that offers a low rate.
These 0% for 6 months cards are best suited for people that have a debt on one of their current cards and want to transfer it to a new card with a 0% interest rate. Anyone that gets a 0% balance transfer card should also be prepared to pay off the debt within the introductory time period before the interest-rate reverts to the standard rate.
These cards also work for people that want to use the promotional time period offered and then when it is over switch to another 0% for 6 months balance transfer card. Sometimes it is difficult to get the whole debt paid off in half a year. These cards do not work well for people that need more than a year to pay off their debt or people that want to stick to one card and not move the balance once the introductory time has expired. In this case, a long-term balance transfer card would be more appropriate.
Here are some things you should look for when you're doing a comparison between 0% balance transfer credit cards.
- Find the credit card that has the longest promotional period for the 0% interest rate.
- Compare the interest rates for purchases.
- See if they have any extra rewards.
- Find out if the cards offer both a 0% interest rate for balance transfers and for purchases, and whether they last the same amount of time.
- Once the 0% for six months has finished, find out what the new interest rate will be on the balance transfer.
- Find out if there is a handling fee on the transfer.
- Read through the terms and conditions and find out how the payments will be applied. If you use your card for purchases and the interest rate is higher than the balance transfer rate, none of your payments will go towards your purchase balance until you have finished paying off your balance transfer. This means that interest will continue to grow on your purchase amount, and you will be accumulating new debt while you are trying to pay off the old one.
When you're doing a comparison of 0% balance transfer cards keep the above tips in mind. You should be sure of the card you want before filling out your application so that you get the best card possible.
Balance Transfer Rates and Purchase Rates
When you are comparing 0% for six months balance transfer cards, you should understand that these cards should be used for a balance transfer only. You can really end up in a lot of trouble if you start using this card to make cash advances or to do your shopping. These balance transfer cards only offer the introductory rate on balance transfers and do not offer it for purchases.
The balance on a transfer and a balance on a purchase are two separate things. Credit card companies keep them separate and their rule for repayments is that the balance with the lowest interest rate will get the payments you make before the balance with a higher rate. This means that if you take a balance transfer card and use it to make a purchase, any of your repayments will go to directly towards the balance transfer amount, and the purchase balance will sit on hold and collect interest. By the time you get your balance transfer paid off, you could have a whole new debt that started out with one purchase only.
As already mentioned, there are some cards that offer a 0% rate for balance transfers and for purchases. If you need a card for both, this may work for you. You must make sure it that the 0% interest rate lasts the same amount of time for both the purchases and the balance transfer. If the balance transfer offer lasts longer than the purchase offer, then as soon as the purchase offer has expired, you will be stuck paying interest on the items you have bought. The simplest way to avoid getting into this situation is to make sure that the purchase and transfer rates are both the same and both end on the same date.
You should remember, however, that the reason you are in this situation is your spending habits need to be controlled.. If you start spending money on your new card and don't have the means to pay it off while you are trying to pay off your balance transfer, your debt will continue to grow. This means that you will be working backwards and getting into more debt. Always keep in mind that the goal of a balance transfer card is to eliminate debt. If you start making purchases with your new card, or even get a second card to make purchases, you may be taking yourself back into another hole of debt.
The ideal situation is to get a 0% balance transfer card, make your payments, and get out of debt. If you do not feel that you can possibly pay back your debt within six months then you should look for a long-term balance transfer credit card. This will give you more time to pay off your debt. You may want to also consider a low rate credit card which may save you money in the long run. This card gives you one low interest rate that lasts for as long as the balance stays on the card.
Another thing you can do is become a credit card tart. This means you could get a card that has a 0% transfer balance and then as soon as it is about to expire switch to another card that offers the same deal. Some people change cards two or three times until their debt gets paid off. This is a trick that you can use to help pay off your debt without any interest if you need more than six months, but it is also a bit risky since the credit card companies may catch on to what you're doing and they will not appreciate it. You may find that you get rejected for a credit card simply because you have applied for too many.
How To Use 0% Balance Transfer Cards
1. Fill out an application.
After you have completed a credit card comparison and feel satisfied that you have found the right 0% balance transfer card, you are ready to fill out your application. The easiest way to go about this is by doing it online. You will need to have some necessary information by your side to fill in the form. You should have your personal details available as well as your income level. Many balance transfer card application forms have a section on it that you can fill out and provide the details of your other credit cards that have a balance that you want to transfer. This makes the whole process go much more smoothly and quickly. You will receive your credit card by post if you have been approved. They may also contact you and ask for additional details.
2. Start paying off your debt.
The first thing you are going to have to do is set up a budget to make sure that you can meet the monthly payments and get the debt paid off within the introductory time period. If you are serious about clearing up your debt with a 0% balance transfer card, then you are going to have to make some changes to get it done. The fastest way to do this is to start saving money by cutting out some of your expenditures on luxury items. It won't be too hard to do if you're really serious about clearing up the debt.
Many balance transfer cards have a 0% for 6 months interest rate. This gives you a chance to get caught up without any interest being added to the debt. This does not mean, however, that you do not have to make a payment if you can't come up with the cash. You have to meet your minimum required payment every month or you risk having the balance transfer offer revoked. Then you would be back in the same situation you started in.
3. This is a balance transfer card only.
This card is designed for a specific purchase and must be used that way. The thing that you can do is hide the card anyway so that you never use it for any purchases. You should also never use it to withdraw any cash. Interest will be added to these transactions and you will not be able to start paying off any purchase balance or cash advance balance until your transfer balance is 100% paid off in full.
4. Find out when it ends.
You need to be very clear about the end date on the introductory period for your 0% balance transfer card so that you can set a target date for paying it off. If you do not meet this goal, you will have to start paying the standard rate of interest on your transfer balance. Some cards come with a very high standard rate of interest, and if you have to start paying it you will be right back in the situation you are trying so hard to resolve.
5. Make use of the entire promotional time period.
The sooner you can transfer over the balance to your new card, the sooner you can start taking advantage of the 0% interest rate. The introductory time period does not start once the balance transfer has taken place, it begins when you get your new card. If you put off making the transfer balance for too long you will lose valuable time. Six months may seem like a long time to pay off your balance when you first get the card, but when it comes to debt, it really isn't that long.
Consider how long it took you to get into the situation, and how long it would take you to get out of it if you couldn't get a 0% balance transfer card. You need to really appreciate this time that you been given as a chance to get caught up once and for all and eliminate your debt. This is how to use 0% balance transfer cards. Use them to pay off your balance only and never give in to the temptation to use them for cash withdrawals for purchases. You are trying to eliminate debt, not create more. If you use the card as it is intended you can have a fresh start at a debt-free life.
Before You Apply...
- You should make sure there are no errors in your credit history, such as defaults that have been attributed to you by mistake, or previous problems that have been settled but are still showing as active.
- You should close down any dormant accounts. These may be accounts you opened to take advantage of a 0% offer in the past, then never used again. These will be bumping up your available credit and making it seem like your income to credit ratio is out of proportion.
- Cut ties that may be causing problems for you. Ex-partners listed as still being associated with you can cause serious harm if their finances are in a bad state. Have them removed from your credit history.
- Oddly enough, if you have never had any sort of debt before, this may actually be causing your inability to gain a 0% card. Credit card providers are reassured by a history of good borrowing because it shows you can be trusted. "Starter" credit cards are available should you need to establish yourself in this area, or if you need to get back on the credit ladder after a fall.
The Bottomline
1. Compare What is Out There
Your post box may not be filled to the brim with credit card 0 % offers like years past but there are still companies out there that are offering programs that are definitely worth considering. Be careful of the fine print because not all credit cards offer a 0% balance transfer guarantee. They may offer a 0% percentage rate but it may only be on purchases. Just be sure you are certain about exactly what the credit card company is offering before you jump in and apply for the card.
2. Understand The Limitations of the Offers
Credit card companies have gone out of business trying to maintain a business on these balance transfer programs. As a result, they have become much more stringent about their policies and the details of their offers. And, these offers are a bit more beneficial to the credit card company than they were before. Most offers include a transfer fee of 3-5%.
In addition, the offer is for a limited time. Gone are the days of lifetime balance transfers. What you will find now are mostly offers that last up to 6 months and sometimes to 12 months. This is not to say that it is not a benefit to you. It can most certainly be a benefit. If you plan to pay off your balance within the time period then the offer is definitely to your advantage.
3. Know The Ins and Outs of Balance Transfers
Balance transfer cards have a promotional period where the borrower is allow a very low rate for a specified time period. One this time period has expired, your rate will jump significantly. The rate is often much higher than a regular card that does not offer a balance transfer program. You will have to determine whether or not you are able to pay off the balance within the time frame in order to see if the program is beneficial to you. And, if you know that the charges over time are less than switching to another program than you know you have made the right choice.
4. Use Your Balance Transfer Card Wisely!
Read all of the terms of your agreement before deciding to go out and use your card. Most credit card companies will apply your monthly payments only towards your new purchases and not your balance transfer. In fact, it goes like this. Payments are first applied to recent purchases, then to balance transfer fees and then finally to the actual transferred balance. If you are not careful, your balance will not go down in the time period you'd hoped!
5. Understand Your End of the Bargain
Many people will enter into a balance transfer program making the assumption that they do not have to make a payment during the time period that offers the low or 0% rate. This could not be further from the truth. In fact, if you make this assumption incorrectly, you can forfeit the introductory rate offer entirely. Make sure you understand all of the requirements of the cardholder.
6. Prepare For the Unexpected
You may apply for a balance transfer offer but because restrictions are much for stringent now for credit card companies, you may find yourself on the short end of the stick sometimes. If your application is rejected, have a contingency plan in place. If you have several cards, then you might consider transferring a portion of the balance from higher rate cards over to cards that have a lower rate.
Credit card 0% offers exist but you have to be patient and sometime you may even have to do some fishing on your own to find the best deals. It is possible to use these programs to help you get out of and stay out of debt.
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