Enjoy the best of both worlds with 0% balance transfers and 0% purchase credit cards. Repay your credit card debt with no interest for an extended period and enjoy 0% on purchases for up to 15 months, allowing you to spend on what you need now and repay later with flexibility.
These offers are about as exciting as credit card deals get, providing credit cardholders with interest relief on their debt. The purpose of a $0 balance transfer and 0% purchases credit card is to make paying off an existing credit card debt easier while allowing interest-free purchases to be made on the same card. 0% percent interest is an offer for an introductory period.
This guide was designed to help you make the most comprehensive comparison possible to find you some of the lowest interest rates on the market and to help you to avoid common mistakes made by credit card customers.
Let’s assume that the offer periods for the 0% balance transfer and the 0% purchases are both six months and that they run concurrently. If that is the case, then this is a great product because they work hand in hand to give you one of the most beneficial offers available for people making purchases on a balance transfer credit card.
Compare Credit Cards with both 0% Balance transfers & 0% Purchases
The finder.com.au best* 0% balance transfer and purchase credit cards
Compare the features of the balance transfer and purchase cards below.
|Credit Card||Purchase rate (p.a.)||Balance transfer rate (p.a.)||Additional Features|
|NAB Low Fee Card||0% for 15 months||0% p.a. for 15 months with a one off 2% balance transfer fee||Enjoy a low annual fee of $30.|
|NAB Velocity Rewards Premium Card||0% for 15 months||0% p.a. for 15 months with a one off 2% balance transfer fee||Receive 20,000 bonus Velocity Points.|
|NAB Qantas Rewards Premium Card||0% for 15 months||0% p.a. for 15 months with a one off 2% balance transfer fee||Get 20,000 bonus Qantas Points.|
|NAB Premium Card||0% for 15 months||0% p.a. for 15 months with a one off 2% balance transfer fee||Enjoy premium card benefits with complimentary travel insurance, platinum concierge and VIP Lost Card Cover.|
Table of Contents
How do 0% balance transfer and purchase rate credit cards work?
To understand what this all means, we need to look at what can happen when the 0% offer is only on a balance transfer.
- Making purchases on a balance transfer trap. Balance transfers are a great offer — their popularity is a testament to this. But one trap some people can fall into on a regular balance transfer card is by using it to make purchases. The reason purchases cause issues is because there are no interest-free days on credit cards when the balance isn’t paid in full each month, so you’ll have to pay interest on the recent purchase. For every purchase made on a standard balance transfer credit card, the purchase rate of interest accrues on each purchase from the day of the transaction until the purchase is fully repaid including the interest component. This isn’t an ideal situation for people who are making an effort to get out of their debt.
- The trap is solved with 0% purchases. The combination of a 0% balance transfer and 0% purchases card solves this consumer pitfall by eliminating the possibility for consumers to be stung with interest on purchases during the introductory offer period. For cardholders on a normal balance transfer offer, the latest credit card reforms require banks to allocate payments to higher-interest debts first. It works this way: the debts on your credit card will be paid off in a certain order of the highest interest rates first. Customers who thought they were putting a massive dent towards their credit card debt are paying off their new purchases first and are being less effective at paying off debt than they intended.
How to compare 0% balance transfer and 0% purchases credit cards
When comparing 0% balance transfer and 0% purchases credit cards, make sure to identify the type of card that is most suited to you.
Here we’ll examine the main features of these cards, what you should be looking for, and why you must understand how certain factors can work against each other.
Types of 0% balance transfer & 0% purchases credit cards
No two 0% balance transfer and 0% purchases credit card offers are the same. They’re available across a variety of cards, so annual fees, revert interest rates and the class of the card can help set your alternatives apart.
- Rewards cards. A rare beast to carry this type of offer. Generally only trimmed-down rewards cards will have the full 0% on balance transfers and 0% on purchases. So you may expect to get complimentary insurance and some other helpful, low-key privileges. But that is generally about it.
- Reduced annual fee for first year offer. Even a cursory glance at the above comparison table will show that many of the 0% balance transfer and 0% purchase rate offers have a reduced annual fee for the first year. This can be very helpful for customers who wish to keep their upfront costs low while they knuckle down to pay off their debt.
- Platinum cards. Platinum credit cards are a class, or category, of credit cards that are targeted at higher income customers than classic credit cards and often require a sharp credit record. In return, customers get higher credit limits as well as better extras, including complimentary overseas travel insurance.
- Classic cards. Classic credit cards are a good option for people on a lower income than is required for platinum credit cards. They are usually a low-frills option and therefore tend to have lower annual fees than platinum credit cards.
- Low rate cards. Low rate credit cards are a pretty strong offer in the 0% balance transfer and 0% purchases scene, as purchases on the cards revert to what is usually a pretty low purchase interest rate.
How to use 0% balance transfer & 0% purchase rate credit cards
Your 0% balance transfer and 0% purchases credit card will be a huge boon during its initial offer period, but only if you make effective use of it. Here are the main dos and don’ts of using this particular credit card to keep in mind before you apply:
The do’s of 0% balance transfer and 0% purchases cards
- Make your balance transfer quickly. Though the introductory period may only last a number of months, your opportunity to make the transfer may be limited to a shorter period (such as within the first thirty days), otherwise the promotional rate will be lost. The longer you leave it, the less time you’ll have to enjoy avoiding interest. Take advantage of the offer by transferring your balance during your card application.
- Understand how to make the transfer. As mentioned already, the easiest way is during your application. Otherwise, you apply online, over the phone or via paper forms in the mail once your card arrives.
- Pay off your balance in good time. If your deal is for six months, that’s not an awful lot of time. Make sure you are budgeting like mad to ensure the balance on your 0% balance transfer and 0% purchases credit card is paid off in full before the offer period expires. You will be charged the regular rate of interest on any unpaid balance, which could be as high as 20%. However, if you can’t get there by the cut-off date, it may be worth considering balance transferring again to another balance transfer credit card.
- Don’t think this can become a habit. Making one 0% balance transfer after another to avoid paying your debts will be noted in your credit history. Your credit rating may drop due to your regular credit applications, and the assessors of your credit file may well read into your habits and reject applications from you.
- Don’t make any cash transactions on your 0% balance transfer and 0% purchases card. Cash transactions aren’t often included in 0% promotional offers, and when they are, they still carry the very expensive cash advance fees.
Things to watch out for when using this type of credit card offer
- Revert interest rates. Cardholders need to be aware of the spike in interest they can expect at the end of the promotional offer. The balance transfer amount will revert to either the higher cash advance interest rate or the purchase rate. If the balance won’t be paid in full by that time, you may want to consider swapping cards or at least consider how you will budget. Rates on new purchases will revert to the purchase interest rate at the end of the introductory period.
- Cash transactions. This is never a good idea on any credit card, and often unlikely to be covered by any 0% deal. Even if they are, there will still be a cash advance fee for every cash advance transaction. This is an extra charge of around 2-4% of the transaction amount. If the cash advance fee is unpaid by the next statement due date, it will accrue interest as well at the cash advance rate.
- Different length offer periods. The length of these offers can vary, so it’s worth deciding from the outset what your plans are when the period ends and whether a longer balance transfer and purchase period will suit you even if the offer interest rate is higher than some of the shorter, 0% offers.
- Annual fee. Check this is not too much higher than average. A little higher than normal may be okay for the benefits you’re gaining from your 0% balance transfer and 0% purchases offer.
- Minimum monthly repayments. Although you want to pay your credit card balance in full each month when possible, your monthly minimum payment can be a good indicator of how high your current outstanding balance is. By being prepared for your minimum monthly repayment you can also help avoid late fees, which can be around $30-$40 for some cards. Calculating your own minimum monthly balance repayment is as simple as looking at what your minimum percentage repayment is and how much your outstanding balance is (interest included). You can also use an online credit card repayment calculator to tell you what your minimum monthly repayments will be by looking at your current balance and credit card interest rate.
Frequently Asked Questions
If I make a purchase during the 0% balance transfer and 0% purchases period, what rate of credit card interest am I charged?
During the 0% purchases offer period, purchases won’t incur interest.
However, after the 0% offer period ends, you will be charged the purchase rate of interest.
This will be charged from the date the transaction takes place if you’re carrying a balance from month to month as interest free days are waived for unpaid balances.
If I don’t pay my balance in full and on time, what happens?
For the 0% offer period, 0% interest is applied for the outstanding balance.
After the offer period, if you don’t pay your balance in full by the statement period, you will not receive any interest free days on purchases you make with the card.
What does the interest rate revert to at the end of the 0% balance transfer and 0% purchases period ?
Purchases usually revert to the normal purchase interest rate on the credit card. Balance transfers however either revert to the purchase rate or the cash rate. To find out what rate your balance transfer will revert to, view the review of the specific credit card on CreditCardFinder.com.au.
Do you still have to make any credit card repayments during the 0% balance transfer and 0% purchases period?
Yes, the minimum monthly repayment must be paid each month to stop your card from going into default – if you have a balance transfer promotion charging 1% interest and the minimum monthly repayment is 3% – you’ll be paying 2% off your balance each statement period.
Is there such as thing as a credit card that has a 0% balance transfer and 0% purchase rate and also a $0 annual fee?
Yes, there were such offers at the time of writing. However, offers change from time to time, so the best way to stay up to date with the latest offers is to check our balance transfer comparison page.
Yes, there were such offers at the time of writing. However, offers change from time to time, so the best way to stay up to date with the latest offers from providers is to check our balance transfer comparison page.