Guide To Lifetime Balance Transfer Credit Cards
Who else wants to transfer their balances into 1 credit card for life?
Don’t let your high interest rate credit cards sit around for over a year accumulating as you pay the absolute minimum. Consolidate your balance(s) into one single low balance transfer credit card rate and save an incredible amount.
If you need to find out more about long term balance transfers, browse through our credit card balance transfer resources or use our balance transfer calculator to find out how much you could save.
Unless you have over approximately $10,000 in balance’s to be consolidated, the lower rate on the latter cards will likely not compensate for the higher annual fee of the ‘for life’ offers. These credit cards also require a good credit file for application approval.
Featured Long Term Balance Transfer Card Offer
If you are looking to clear an existing debt, then Citibank Ready Credit is one of the best option for you. It offers a low interest rate on balance transfers for long time period.You can also enjoy the freedom of a higher credit limit. Plus a low annual fee.
- $0 p.a. annual fee
- 18.99% p.a. on purchases
- 5.9% p.a. for 24 months on balance transfers
- Cash Advance Rate of 18.99% p.a.
- 0 days interest free
- Minimum Income Requirement of $35,000 p.a.
Balance Transfer Credit Cards Comparison
These offers are ideal for those who wish to pay a low annual fee on their credit card, and have a low standard interest rate on purchases after the balance transfer offer has expired.
Table of Contents: Guide to Lifetime Balance Transfer Credit Cards
- Compare lifetime balance transfer credit cards
- Which is the best lifetime balance transfer credit card?
- How do Balance Transfer for Life credit cards work?
- How to compare Lifetime Balance Transfer Credit Cards
- How to use a Balance Transfer for Life credit card
2.9% Balance Transfer Credit Cards For 12 Months
Are you after 2.9% balance transfer credit cards? Just as well you are because we have got quite the deal for you to choose. Short of stumbling through all Australian bank branches to find you all available deals we have actually scoured the web for the same.
Fueled with burst of caffeinated breaks we think we found the top of the cream of all 4.9% balance transfer credit cards for you. Enjoy the selection process.
An overview of Australian 2.9% balance transfer credit cards:
If there is a better deal than getting 2.9% balance transfer for a 12 months period then it is called getting the deal for life.
Why would one choose a 2.9% balance transfer credit card for 12 months anyway?
It’s simple really. Instead of choosing a 0% interest rate card that will revert to a much higher interest rate after six months you can gain more by dealing with a 2.9% card.
Mind you, you need to have a substantial amount of existing debt to fully benefit from one of these cards, little debts are better served with the 0% balance transfer version whereas very large debts should consider a personal loan instead.
These cards are ideal for those wishing to pay a low annual fee and own a low standard variable interest rate after the initial balance transfer offer has expired.
How Do Lifetime Balance Transfer Credit Cards Work?
Balance transfers for life credit cards work by allowing you to shift a debt from a higher interest card to a lower interest card.
Over time, balances can build on credit cards and store cards. The interest rate on a credit card ranges from around 10% to nearly 20%, and store cards are just not funny. The average debt on an Australian credit card is more than $3,000, which means there are people who are carting around a far higher burden.
The obvious solution to this is to find balance transfer credit cards with a lower rate of interest. Although there are offers of 0% on balance transfers, these last for a shorter period before the regular rate kicks back in. A balance transfer for life is a better option if you have a larger debt to settle, and, despite your best intentions, you envisage it lasting beyond the timescale offered by a fixed-period interest rate offer. This assessment will depend on your personal finances at the time, and how you predict them panning out over the next few years.
The basic process with a lifetime balance transfer credit card:
- You initiate the transfer - This can be done during the application process, or later using special forms, over the telephone or via the internet. Make sure you don’t delay with this, or the offer could expire, and the sooner you transfer the debt the sooner you will begin to enjoy the lower rate of interest.
- You pay as much as you can every month – As you have the “luxury” of a balance transfer for life as opposed to one for six or twelve months, you do not need to go mad with this and starve the kids to pay off a few extra dollars, but you equally should not lose track of the importance of settling your debt as soon as reasonably possible.
- Never fail to pay the minimum payment – However dire your finances may be for that month, always pay the required amount. If not, you will be charged a late fee, it will appear on your credit history, and you may even forfeit your special rate.
- You watch the balance reduce month by month – This is the ideal scenario and it is perfectly achievable if you approach your card with the right attitude.
- You treat your card as though it’s radioactive - This is the above-mentioned right attitude. Do not touch your card for any reason. Do not have it in your wallet or purse. Keep it locked safely away (although the container does not strictly speaking need to be lead-lined).
This last point is perhaps most important. Any extra activity on your card, be that purchases or cash transactions, will mean your balance transfer for life will not work effectively. These amounts will, in effect, form a separate amount within your total debt, and this portion will not reduce until your transferred amount has been paid off in full. In other words, it will sit and accrue interest at the standard rate for however long it takes for you to clear the balance transfer, even if that takes years.
How to compare Lifetime Balance Transfer Credit Cards
However attractive a 0% balance transfer rate appears, if you have honestly assessed your level of debt and realize that the shorter period attached to the 0% rate is just not long enough, then you may want to compare balance transfer for life credit cards.
A balance transfer for life is something of a misnomer as it almost sounds like a debt you can only fully pay off on the day you die. Actually, they exist to try and help you avoid keeping a debt that feels like it’s lasting a lifetime. The “life” bit obviously refers to the transferred amount, and it means that when you transfer your debt it will attract the advertised low rate of interest for as long as it takes for you to completely clear it.
Simplify your balance transfer for life comparison:
When you make a balance transfer for life comparison, you will need to do some research first to find the lowest rate available. Other things to take into account will be the annual card fee, and the percentage rate that is used to work out the balance transfer fee. Beyond this, although it is always a good idea to check out the fine print of any deal, you shouldn’t really need to consider too much more than the interest rate that applies for the life of your balance, and whether this is fixed or variable. A variable rate may fluctuate according to the economy at large, and it is your call as to whether you want to roll with that or plump for a fixed rate to remove any doubt. Rates vary from around 5% up to around 9%.
If you are approaching this in the right way, the other features of the card should be largely moot because your new card should not be used for anything other than clearing your balance. If you follow that advice when you compare balance transfer for life credit cards, then issues about cash transactions, interest rates on new purchases, interest-free days on purchases etc will not matter. Bear in mind that credit cards often work best when kept for a single use. They may possess a number of features, but some of them will not be good for your pocket – like cash advances – and may cause more issues than they solve. Some features can end up clashing with each other, where one use voids another, or causes it to be more expensive.
To explain in a little more detail, let’s look at new purchases. New purchases may be subject to a special introductory rate, but will more likely just be set at the standard interest rate for the card, which may range from 10% to 19%. It is important to understand that there is a payment hierarchy that operates where balance transfer cards are concerned, which means that your repayments go to clear your transferred amount first. If you take three years to pay off your transferred debt, then your new purchases will accrue interest at the higher rate for that entire time. That’s a lot of interest, and it will very likely negate any benefits you were aiming to achieve through getting the card in the first place.
Finally, remember as you compare balance transfer for life credit cards that, as with any balance transfer card at any rate over any period, you should never use your new card for cash transactions. These are expensive at the best of times, but when used on a balance transfer card they will join any purchases at the back of the repayment queue until the transferred amount has been paid off in full.
How To Use A Lifetime Balance Transfer Credit Card
If you have received your balance transfer for life credit card and you are wondering what happens next, here is some advice:
- Make whatever transfer you wish to make as soon as you can – This is for two reasons. Firstly, the sooner you transfer the debt, the sooner you will begin to enjoy the lower rate of interest, and secondly, there may be some time limit imposed on your eligibility to make such a transfer, which could be as little as thirty days. If you don’t get started immediately, you may find that time has slipped away from you and all you have in your possession is another credit card to spend on. The best time to make a balance transfer for life is when you are making your application, where a section will exist for you to fill in the required details so that the transfer can be initiated.
- Know exactly how the balance transfer for life can be set in motion – If you have not made your balance transfer request during the application process, you can use the special forms that will have arrived with your card, or you can do it via the telephone or internet banking facilities.
- Work out a repayment budget – Just because it is termed a balance transfer for life does not mean it has to last that long. “Life” refers to the life of the loan, not your own longevity. Your intention should be to pay off your debt as soon as you can, so it is important to sit down and form a plan of attack. Remember that your debt may well actually grow over time if all you pay off the minimum amount required every month. It is in your own interest to do this, however that should not mean you raid money set aside for everyday living expenses. You have to eat, and your co-workers will not thank you for saving on detergent by not washing your clothes.
- Always make your minimum repayments – This is vital to avoid late fees which will only add to your debt. Failure to make this payment may in some cases even lead to your special balance transfer for life rate being withdrawn, so that your debt reverts to the standard rate of interest. It could also adversely affect your credit rating.
- Keep your card for one purpose only – You took your balance transfer for life credit card for the purpose of your balance transfer, so keep it that way. Do not make any new purchases with it, or perform any cash transactions. They will, in effect, form a separate amount within your total debt, and this portion will not be reduced until your transferred amount has been paid off in full. In other words, it will sit and accrue interest at the standard rate for however long it takes for you to clear the balance transfer, even if that is years. Ouch.
Points for comparison:
There are not many points to consider when you compare life of balance transfer credit cards. The main one is the interest rate (APR) that will apply for the life of the debt – the lower the better. It may be okay to suffer a few extra percentage points for a few months, but over a period of a few years, it can make a huge difference.
You may find one or two credit card providers that charge a small fee for making the transfer – perhaps 1% of the transferred amount. You will need to weigh that against the applicable interest rate and the annual fee to know if it rules out that card as an option
The annual fee. Most cards have one of these, so it is not a factor to damn any particular card, especially as the interest rate is the more telling number.
What should I look for?
The main point to look out for when you compare life of balance transfer credit cards is the interest rate (APR). If your debt is going to last for perhaps a couple of years or more, the applicable interest rate will be a very telling factor, so you should be aiming to keep it as low as possible.
The annual fee on the credit card may be a factor to consider, but a few dollars more on the annual fee for a lower rate of interest is a fair trade-off, given the unlimited length of time you are being allowed to repay your debt. Any slightly higher annual fee will be more than recouped over that time by the savings you make by having a lower APR.
The worst thing to do with a life of balance transfer credit card is use it for any new purchases. Your purchases will be at the regular rate of interest, and on a card of this sort that rate is usually higher than average, heading towards the 20% mark. The real killer is how your repayments will be applied to your balance, once any purchases or cash transactions have been added in.
What should I avoid?
The answer is that they will be applied in exactly the same way as before you made those purchases, i.e. towards the transferred balance. This is the way the system works. It’s called the adverse order of payments, or the allocation of payments. It means that your cheapest debts will always be paid off first, and not until they are paid off will your other debts be reduced. Thus, if you have a balance transfer at 5% and it takes three years to pay it off in full, any purchases made at 18% will keep accruing interest that whole time, untouched by a single cent of your repayments. That rather defeats the whole purpose of having made the low-rate transfer in the first place.
The main point here is that you actually do bother to compare life of balance transfer credit cards. According to a recent survey, 60% of Australians only apply to their own bank for a credit card. How they expect to find the best deal is anyone’s guess.
You may be so keen when you compare life of balance transfer credit cards that you forget certain key issues. One is that you should never make any new purchases on this type of card, as they will be made at the higher regular rate of interest and that part of your balance will remain completely untouched by any repayments you make until the transferred amount has been paid off in full. Remember the rule: the cheapest debts are paid off first. Don’t get caught in this trap.
You should also make certain that you make your balance transfer as soon as you can. It is best if you can do it when making your application, but if that does not happen, do not delay for very long once your account is open. There may well be a time-limit on making a transfer – perhaps one to three months – and after that time the balance transfer offer will be lost to you.
Always pay at least the minimum amount, and pay it on time. Failure to do this will result in charges applied to your account and may even void your special rate.
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