Credit Cards with 0% Interest on Balance Transfers

Learn about how a 0% interest balance transfer can help you tackle your credit card debt

A heavy debt burden can be the most depressing, disheartening thing that blights your whole life. If you find yourself paying debt off, yet seeming to make no progress at all, it feels like you’ll never get out of the swamp.

You may not be aware of it, but the banks have come up with a superb solution to this problem – credit cards with 0% interest on balance transfers.

How It Works

How they work is simple – you take all your credit card debt, which can be attracting anywhere from 13% to 20%+ interest, and transfer the lot to another credit card which is offering 0% interest for a limited period, usually 6 months.

Nearly all cards have this initial arrangement, so it makes sense to look beyond the introductory period and see what the standard rate will be after the six months. The most important thing to remember about using your credit card with 0% interest on balance transfers is not to use it for ordinary purchases while you’re paying off the transferred debt.

That’s because your repayments are first applied to those debts with the lowest interest rate, leaving the high interest rate debt piling up in the background.

You could end up no better, or even worse, off than when you transferred your balance.

A Practical Example

Just to see how it works: imagine you’re paying off a credit card debt of $1000 at say, 20% interest. That represents $100 over six months.

If you have a credit card with 0% interest on balance transfers, you’ll save you that $100.

When choosing your credit card with 0% interest on balance transfers, as with all kinds of credit cards, you have to research all aspects, like the standard rate of interest, how long any introductory offers last, what rewards programmes are available, what are the annual fees and what are the differing rates for cash transactions.

A Debt-free Boon

For the fortunate among us who are debt-free, a credit card with a 0% interest rate on a balance transfer is a useful way of getting an interest-free loan for six months.

As long as you stay abreast of when the interest-free period runs out and you repay the loan as soon as possible, you can get a handy little loan at a very attractive rate.

The bottom line with these credit cards is, however, that you got into trouble because of your spending habits. Learn to control them before you get into the financial cactus again.

Click here to read the official terms and conditions

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• Comparison of Top 10 Credit Card Offers

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
HSBC Credit Card	Editor's Choice: 0% for 6 months Balance Transfer & No Annual Fee Featuring a $0 annual fee for life, and 0% p.a. balance transfer for 6 months, the HSBC Credit Card was voted the Best Transactor Credit Card for 2010.	16.99%	20.75%	0% for 6 months	$0	55
Suncorp Clear Options Standard Visa Card	A great 12 month balance transfer offer, combined with a low annual fee and a good interest rate on purchases.	12.24%	17.99%	1.9% for 12 months	$39	0