Balance Transfer Scenarios Compared

Comparing different balance transfer scenarios can help you figure out how much money you will save. These card offers sound great but you have to actually do the math on them to make sure you are really saving money.

Everyone is talking about balance transfers and the big savings that come along with them. If you are like a lot of Australians you are probably in search of a way to relieve that debt you built up with your Christmas spending. You might wonder how a balance transfer fits into your debt relief needs. A balance transfer is when you move the outstanding debt from one or several cards to a new credit card in order to take advantage of lower interest rates. It sounds pretty straightforward, but there are options. The kind of card you choose depends on the amount of debt you are currently carrying and the length of time you will require to pay off that debt. Balance transfer cards are either zero interest or low interest. These cards are introductory offers which means the rates expire after a certain amount of time. Zero cards have the shortest introductory period of around three months. From there the interest rates go up along with the time period until you get to life of balance transfer cards that have an interest rate at around 5%.

The question is do these cards really save money. We have taken an average credit card debt of $3000 and run the numbers for several different payment scenarios to see how much, if any savings, there really is. The results are listed below.

• Payment Scenario: Making minimum monthly payments

  A long balance transfer rate like those offered from Citibank Platinum Credit Card or Suncorp Clear Options Credit Card save you $3000 over the four years it would take to clear the debt.

• Payment Scenario: One to two year repayment term

  A low balance transfer rate card like the ANZ First Credit Card, or Citibank Rewards Credit Card – Classic Card saved $600 over the time it too to pay off the debt.

• Payment Scenario: Fast repayments

  A zero balance transfer card like the Bankwest Zero Credit Card or the Aussie MasterCard was interest free for the short period it took to pay off the balance.

As you can see every option for a balance transfer saves money. Of course, all of these scenarios are dependent on your dedication to paying off your debt and ensuring that you never miss or make late payments to your card. If you think you can manage it these cards can be a great way to pay off your Christmas shopping, or any other, credit card debt that you are paying too much interest on.

Check out today's featured offers:

Westpac Low Rate	Citibank Clear Platinum	Qantas AMEX Discovery	ANZ Platinum
0% p.a. for 6 months on purchases & balance transfers	2.9% p.a. for 12 months on balance transfers	$0 annual fee Up to 10,000 Bonus QFF Points	0% p.a. for 6 months on purchases & balance transfers

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Popular Credit Card Offers

			Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
	Westpac Low Rate Card - 0% Offer	A credit card with a low rate offer on both balance transfers and purchases, plus a low annual fee.	0% for 6 months (reverts to 13.49% )	0% for 6 months	$45	21.49%
	Citibank Clear Platinum Card	Competitive interest rate on purchases and balance transfers offer.	11.99%	2.9% for 12 months	$99	21.74%
	St George Vertigo	Take advantage of this great offer from St.George with a low rate on purchases and a low balance transfer offer.	13.24%	0.99% for 12 months	$55	21.49%
	ANZ Platinum Credit Card	An introductory interest rate offer on balance transfers and purchases, plus a $0 first year annual fee.	0% for 6 months (reverts to 19.24% )	0% for 6 months	$0 annual fee for the first year( $87 thereafter)	20.99%