Follow these easy steps to ensure that your balance transfer credit card application is accepted
While completing a balance transfer isn’t a difficult process, following these tips can help ensure that your application is accepted. As every declined application has a negative impact on your credit score, preparing beforehand will increase your chances of approval and set you on the road to debt repayment.
1. Check your credit history
Most balance transfer credit card providers require applicants to have a good credit history. As the purpose of a balance transfer card is to consolidate debt, a credit score that reflects multiple bad debts is unlikely to receive approval.
If you’re unsure what your credit score is, you can request a copy of your credit file from Veda group. If you sign up to Veda group, you’ll receive a notification whenever a change appears on your credit history.
Once you receive your credit score, you’ll be able to gauge whether you’re in a position to apply for a balance transfer or if you’ll need to spend some time improving your credit score first.
2. Get an accurate pay out figure from the bank
Before you make the switch, contact your current provider to confirm the final payout figure. You can’t close your old card unless the entire debt has been repaid (or moved), so you’ll need to confirm your payout figure to understand exactly how much you need to transfer. Some fees are charged monthly, so you the amount showing in your account may be less than what you actually owe. Logging into online banking won’t necessarily show you what the closing figure is.
For instance, while the interest on your balance is calculated daily, it’s only added onto your account at the end of the month. Similarly, you may not realise that regular fees, such as your annual fee, are due and these can also add to your overall balance. Therefore, if you don’t realise these charges are due to appear in your account and you only request to transfer the initial balance to your new account, you’ll find that your remaining debt continues to earn interest and you’ll be unable to close the old account until it’s repaid. You’ll also need to ensure that any direct debits from your account (such as automatic bill payments or charity donations) are transferred to your new account before you close the old one.
While calling your bank may not seem ideal, it’s worth it in the long run. When you inform your current bank that you’re after a payout figure for your balance transfer, prepare to be transferred to the cancellation team. These customer service representatives are trained to talk you out of your decision and will try to persuade you to stay with the bank. Whether they’re offering you bonus rewards points or a cheaper rate, remember the reason why you’re leaving and stick with your initial decision.Politely say “no” and ask for the final payout figure.
3. Compare your options to find the right card
There’s no such thing as the ideal balance transfer credit card. You’ll need to compare the available options to find the right one for you. Consider the costs, features and perks of the card to determine whether you can both afford and benefit from it. You can easily do this with the table below.
As well as the balance transfer feature, consider the other costs and benefits of the card to confirm whether the card will be of use to you when the promotional offer ends. Does the card come with a rewards program? Can you take advantage of interest-free days? How much is the annual fee? Consider your usual spending habits and whether the card compliments your financial needs.
See our guide for tips on comparing credit cards for more considerations and advice.
4. Make sure you can transfer to your bank
When you’re comparing cards, a crucial element is where you can actually transfer your debt. Credit card providers don’t allow you to transfer your debt to another account under the same bank. While you can keep any remaining debit accounts open, you’ll need to look elsewhere if you’re considering a balance transfer.
Some banks also won’t accept balance transfers from other banks, usually because they’re owned by the same organization. For example, St.George cardholders can’t transfer their balance to BankSA credit cards as both brands are owned by Westpac.
See our comprehensive list of providers to discover who you can and can’t transfer between.
5. Confirm that your new card can support your debt
- The available credit limit
Most credit cards allow cardholders to transfer a percentage of the approved credit limit. For example, St.George applicants can transfer up to 95% of the credit limit, while Latitude Financial Services customers allow cardholders to transfer the entire credit limit amount. To see whether the card is fit for your balance transfer, calculate the total debt you’ll have to transfer (this is where your confirmed payout amount comes in handy), the credit limit of the new card and how much of that limit you’re allowed to transfer.
If you don’t calculate these figures beforehand, you may find that you’re unable to transfer your entire balance. Not only does this mean that a chunk of your debt will continue to accrue interest, you’ll also be unable to close your old account. Consider these restrictions before applying to find a card that can support your balance.
- Accounts under different names
There are some restrictions in place around transferring to or from joint accounts or from accounts under different names. Most providers won’t allow cardholders to transfer balances from an account unless the primary cardholder’s name is the same for both cards. So even if you’re an additional cardholder, the balance may still need to be transferred under the name of the primary account holder. If you’re unsure, contact the bank you’re interested in to confirm these details.
You can’t transfer joint accounts to single accounts or vice versa. Instead, if you have a joint account, you’ll only be able to transfer your balance to another joint account. If your credit history isn’t great, having a joint balance transfer can help improve your chances of approval if your partner has a solid credit score.
6. Gather all the details you’ll need for application.
So you’ve compared your options, decided on a card and confirmed that it meets your balance transfer needs. To simplify the application process and increase your chances of approval, it’s wise to organise all of the necessary documents before you begin the application. You can usually find this information in the relevant product disclosure statement, but some of the standard information you’ll need to provide includes:
- Contact details. Such as your phone number, email address and postal address.
- Financial details. You’ll need to provide details about your annual income, monthly expenses, any other loans or debts and your employer’s contact information.
- Proof of identification. You may be asked to provide your driver’s licence, Medicare card or birth certificate.
- Balance transfer information. Many providers require that you request the transfer at the time of application, so it’s crucial to have this information on hand. Make sure you have the final payout amount confirmed and that you complete the balance transfer sheet before applying.
You’ll be required to meet some eligibility requirements, so save your time and confirm whether you can apply for the card first. Some of the criteria you’ll be required to meet include:
- Age. Applicants must be 18 years of age.
- Residency. Providers often only accept permanent Australian residents.
- Annual income. Some cards require cardholders to meet a certain income level to receive approval.
Again, all of the information can be found in the online application forms and the product disclosure statement. Confirm that you meet the requirements before applying.
7. Apply for your chosen card
Once you have compared your options, decided on a card, confirmed that it supports your needs and that you meet the requirements, you can apply for the card! When you’ve made your decision, you can click on the “Go to Site” button available on our comparison tables or review pages to be directed to a secure online application.
Here you can complete your application within 10 to 15 minutes. A separate section of the application will be dedicated to your balance transfer request and this is where you’ll need to provide your balance transfer amount, old account details and other relevant information.
See our guide for more tips to ensure the application process runs smoothly.
8. Wait to see if your card has been approved
Most online credit card applications will be able to provide you with a response almost immediately. If your card isn’t automatically approved or declined, it means that the bank is following up the information you have provided to make a final decision.
If you haven’t received an immediate response from your bank or received any feedback within a few days, you’ll need to contact your provider directly to confirm the status of your application.
9. Check that your card has a zero balance and has been closed out
If your application has been approved, your new bank will begin transferring your balance over to the account. However, confirming that your old account no longer carries a balance is your responsibility. If you wish to close your old account, you’ll also need to carry this out once the transfer has been completed. You can do this by contacting your bank via the customer service team.
10. Start consolidating!
Congratulations! You’ve been approved and your balance transfer was successful. Now it’s time to start budgeting to meet (if not exceed) the minimum monthly repayments. This will help you make the most of the promotional balance transfer and get you one step closer to debt-free financial freedom.
See our five simple tips to help pay off your credit card for some inspiration.