Can You Spend on a Balance Transfer For Life?

Firstly – yes you can. Secondly – no you shouldn’t. There are a number of reasons you shouldn’t make new purchases on your balance transfer credit card, namely because you are trying to control your credit card debt not add to it, and also because it will actually set you back further in your aim to gain control of your bad debt.

How can new purchases be so bad for me? That’s your next question right – read on to find out how the interest charges are really calculated on your credit card and how detrimental purchases on a balance transfer for life credit card can be.

Allocation of Credit Card Payments

Every credit card and for life balance transfer offer will be different, but each will set out in the terms and conditions their allocation of payments. This part of the conditions tells you the order in which your transactions will be repaid from the payments you make to your credit card each month.

Typical allocations of payments see the lower interest rate balances and purchases being repaid before the higher interest ones so your high interest purchases are left to accrue interest the longest. Other credit card providers will allocate a payment hierarchy where the oldest purchases or balances are repaid before the newer ones. On a for life balance transfer this still leaves you paying high purchase interest rates on your new spending, while your payments continue to be diverted to your older transferred balance.

While this system may not seem fair, it is important to remember that the credit card providers don’t want you to be debt free. The banks earn their money from charging you interest and while they may seem to lose out when you take advantage of a low or 0% balance transfer offer, the banks are banking on the fact that you will be tempted to spend on your new balance transfer card, accruing more interest on your new purchases than you were saving on your balance transfer.

How to Use a Balance Transfer For Life Wisely

There are some credit card providers who offer a low or 0% interest balance transfer offer and the same low or 0% interest rate, for the same period, on purchases. This means new purchases will not accrue high interest charges, and you can more easily remain in control.

However, when you have taken advantage of a for life balance transfer offer it is because you want to be in control from the beginning, not keep making purchases on your credit card that you can’t afford. Therefore, follow these simple steps to use your balance transfer for life card responsibly:

• You’ll enjoy a low interest rate until your balance is repaid in full, so don’t stretch your budget to make extra repayments if you can’t afford it. Stretching your budget is probably what lead you to accumulate unmanageable credit card debt in the first place.
• Use your balance transfer for life credit card as a repayment tool only. Until the balance is repaid in full, keep all of your spending on a separate, low interest rate credit card, and avoid cash advances from a credit card, opting for a debit card instead.
• Track your repayments on your balance transfer for life credit card. With just one balance transfer to repay on your card, you will be able to clearly see how far you have come in reducing your balance, and how far there is to go. Also, by avoiding new purchases you can be sure your transferred balance will benefit from the low for life interest rate, rather than being cancelled out by new higher interest charges.

While many credit cards on offer have more than one great feature and offer a host of different benefits depending on your needs – a balance transfer for life credit card should have just one purpose. Resisting purchases on your balance transfer for life credit card means you can enjoy genuine low interest benefits to help you repay a wayward credit card balance.

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%