An interest free loan is the dream of many, but few of us are lucky enough to enjoy such a gift, unless you are eligible for an interest free balance transfer credit card. However, while you will have been told never to look a gift horse in the mouth, it is important to inspect this particular gift carefully, because it can bite.
Since interest is often the biggest hurdle for many in repaying their credit card balances, an interest free card seems like the divine answer, as it freezes all of your interest charges and allows you to focus on just your repayments. And focussed you must be because 0% interest balance transfer card offers generally only run for a short period of time, such as six months.
So instead of being bitten by your gift horse, learn more about how 0% interest balance transfer offers really work, and how to make one of these top offers work for you.
Featured 0% for 6 months Balance Transfer Credit Card
The ANZ Platinum Card offers a low interest on balance transfers and purchases with a platinum reward’s program.
- $0 annual fee for the first year ($87 thereafter) annual fee
- 0% p.a. for 6 months (reverts to 19.24% p.a.) on purchases
- 0% p.a. for 6 months on balance transfers
- Cash Advance Rate of 20.99% p.a.
- 55 days interest free
Top 0% interest for six months balance transfer offers:
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual fee | Cash Advance Rate (p.a.) | ||
|---|---|---|---|---|---|
 ANZ Platinum Credit Card |
0% for 6 months (reverts to 19.24% ) | 0% for 6 months | $0 annual fee for the first year ($87 thereafter) | 20.99% |
  |
 HSBC Credit Card |
17.99% | 0% for 6 months with 2% handling fee | $0 | 21.99% |
|
 Westpac Earth Classic |
19.99% | 0.99% for 6 months | $75 | 21.49% |
|
 Commonwealth Bank Low Rate Credit Card |
13.49% | 5.99% for 5 months | $78 ($48 for qualifying customers) | 21.74% |
|
 Westpac Low Rate Card |
0% for 6 months (reverts to 13.49% ) | 0% for 6 months | $45 | 21.49% |
|
 ANZ Low Rate MasterCard – Balance Transfer |
0% for 3 months (reverts to 13.24% ) | 0% for 3 months | $58 | 21.49% |
|
0% for 6 Months Balance Transfers
- What is a 0% for 6 month balance transfer?
- Best 0% for 6 month balance transfer offers
- How to choose the best 0% for 6 month balance transfer offer
- How to use a 0% for 6 month balance transfer credit card
What is a 0% interest for 6 months balance transfer offer?
When you transfer a credit card balance from the card of one provider, you can take advantage of a 0% interest balance transfer offer with another provider. While you can’t transfer a balance from an ANZ credit card to an ANZ 0% interest balance transfer offer, you could transfer that balance to an HSBC balance transfer offer, or another credit card balance transfer offer.
Once your balance is transferred, no interest is charged, and since interest makes up the largest portion of your credit card repayment each month, you have the ability to repay your balance much faster. You will still need to make repayments, but the minimum amount will be much lower without the interest component, and since you’ve been used to making higher repayments anyway, you can pay the same amount to your new card, but have the entire amount going towards reducing your principal balance.
It is important to focus your repayments in this way and repay your balance as quickly as possible, as after the six month balance transfer period, interest begins being charged again, at the card’s revert rate. This revert rate may be the card’s purchase rate or cash advance rate, but interest is only calculated from the end of the six month balance transfer period, not backdated over the previous six months.
Look at how much you can save by not paying interest:
If for example you have a $1,000 credit card balance which is part of a holiday spending hangover, or a charge for an emergency, your standard credit card may be charging you 18% interest.
If you don’t charge any new purchases to the card and pay just the minimum amount:
- You’ll be paying $45 per month in repayments.
- You will pay off the card is 2.3 years, or by making 28 repayments.
- You will have paid $226 in interest.
If you transfer to a 0% interest six month balance transfer:
- You will need to pay $180 per month.
- You will pay off the balance in six months, making six repayments.
- You will pay $0 interest.
- You will save over $200 in interest.
Even if you pay more than your minimum on your standard credit card, charging you 18% interest:
- You pay $180 per month.
- You pay off the balance in six repayments over six months.
- You pay $52 in interest.
- You will still save more than $50 by using an interest free balance transfer.
How to choose the best 0% interest for six months balance transfer offer?
The benefits and savings of using a 0% interest balance transfer credit card for six months are clear, so you now need to clarify your choices, by comparing the features and benefits of each offer, and each credit card deal.
An annual fee is often an inescapable cost of a credit card so compare the ongoing costs of the top 0% interest for six months balance transfer offers:
- ANZ Low Rate credit card has an annual fee of $58.
- ANZ Balance credit card has an annual fee of $79.
- HSBC credit card charges a $0 annual fee.
- Citibank Citi Clear Platinum credit card has a $99 annual fee.
- Citibank Citi Clear credit card has a $65 annual fee.
In order to make the transfer of your credit card balance, some providers will charge you a transfer fee:
- ANZ Low Rate credit card does not charge a balance transfer fee.
- ANZ Balance credit card charges a fee of 1% of the balance.
- HSBC credit card does not charge a balance transfer fee.
- Citibank Citi Clear Platinum credit card does not charge a balance transfer fee.
- Citibank Citi Clear credit card does not charge a balance transfer fee.
At the end of the six month balance transfer period, if you have not repaid your balance in full, it will be subject to the revert rate:
- ANZ Low Rate credit card reverts to the purchase rate of 0% p.a. for 3 months (reverts to 13.24% p.a.).
- ANZ Balance credit card reverts to the purchase rate of 14.49% p.a..
- HSBC credit card reverts to the cash advance rate of 21.99% p.a..
- Citibank Citi Clear Platinum credit card reverts to the cash advance rate of 0% for 6 months thereafter reverts to 21.74% p.a..
- Citibank Citi Clear credit card reverts to the cash advance rate of 21.74% p.a..
To make sure you don’t miss out on the 0% interest for six months balance transfer offer, you need to know how and when the transfer needs to be processed:
- ANZ Low Rate credit card requires you transfer your balance in your application or when you activate your new card.
- ANZ Balance credit card requires you transfer your balance in your application or when you activate your new card.
- HSBC credit card will complete the transfer for you, and if you are transferring balances from more than one card, HSBC will transfer the highest balance first, down to the lowest balance. You must request the balance transfer in your application, or within one month of receiving a new HSBC credit card. The transfer will then take 5-10 days to be processed.
- Citibank Citi Clear Platinum credit card allows you to apply for a balance transfer in your application. You can also process a balance transfer by logging into internet banking after your card is approved and activates, and a Citibank balance transfer takes 10 days.
- Citibank Citi Clear credit card takes 10 days to process a balance transfer which you can apply for in your new credit card application, or process through internet banking.
If you intend to keep your balance transfer credit card for purchases once your balance is repaid, you will need to compare the standard purchase interest rates:
- ANZ Low Rate credit card charges 0% p.a. for 3 months (reverts to 13.24% p.a.) on purchases.
- ANZ Balance credit card charges 14.49% p.a. on purchases.
- HSBC credit card charges 17.99% p.a. on purchases.
- Citibank Citi Clear Platinum credit card has an 0% p.a. for 6 months (reverts to 11.99% p.a.) interest rate on purchases.
- Citibank Citi Clear credit card charges 15.99% p.a. on purchases.
Compare the additional features of 0% interest for six months balance transfer cards
If you get attached to your balance transfer credit card in the six months you are repaying your balance, or if you have simply been looking for a better deal for the way you use your credit card, then compare the other perks of these top 0% interest for six months balance transfer credit cards.
Benefits of the ANZ Low Rate credit card:
- Up to 55 days interest free gives you the chance to avoid interest charges once again, giving you space to repay your purchases.
- Free additional card holders. You can add three additional card holders for free allowing you and your family to save time and money on multiple credit cards from numerous providers.
- Mastercard special treatment. As a Mastercard holder you are entitled to exclusive entertainment opportunities for the theatre, sporting events and musicals, and entry into a range of great competitions.
Benefits of the ANZ Balance credit card:
- Up to 55 interest free days so you can use the bank’s money and keep yours earning interest in savings or reducing interest on your mortgage.
- You are rewarded for repayments. Rather than being rewarded for every dollar you spend, you will earn one rewards point for every dollar your repay from your transferred balance, and your spending once your balance is repaid. Your points are redeemable for gif vouchers and merchandise, and never expire.
- Visa special treatment. As a Visa card holder you are entitled to exclusive merchandise packages, invitations to special events and home entertainment products.
Benefits of the HSBC credit card:
- Up to 55 days interest free when you pay your balance down to zero in the previous month.
- Offered by ‘the world’s bank’ your HSBC credit card includes offers, discounts and benefits wherever you are around the world.
- You can manage your account online by making BPAY payments to pay bills, setting up a direct debit to pay your balance down each month, as well as viewing your statements and points balances.
Benefits of the Citibank Citi Clear Platinum credit card:
- Up to 55 interest free days to allow you to spend the bank’s money instead of your own while you earn interest on your income by leaving it in a savings account.
- Free international travel insurance when you purchase your flights using your Citibank credit card.
- Free purchase protection if an item you buy on your card is lost, stolen or damaged, Citibank can have it replaced.
- Concierge attendance 24 hours seven days a week just a phone call away, offering assistance if you have car trouble, need a restaurant booking or tickets to a show.
Benefits of the Citibank Citi Clear credit card:
- Up to 55 days interest free saves you from paying interest on your purchases for over a month, as long as your balance has been paid to zero on the previous statement.
- Up to 25% off hotels, restaurants and merchandise through Citi World Privileges.
- Up to four additional card holders so you can benefit from one credit account in your house, one balance to worry about and one statement to track.
How to use a 0% interest for six months balance transfer credit card
With such a short balance transfer period it is important you have control of your budget, to ensure you are not hit with a revert rate on your balance, and find yourself again struggling with interest charges. To manage your budget when making a six month balance transfer:
- Budget to repay your balance within the transfer period. With no interest charges to worry about it is easy to calculate the amount you need to repay each month to clear your balance within six months. Make these calculations before you make the transfer so you can see whether the amount will fit into your budget each and every month, for the next six months.
- Avoid card hopping. Normally, if you’re approaching the end of a balance transfer offer and you don’t look likely to repay the balance, you can transfer to another low or zero interest offer. However, hopping from six month offers makes for a lot of credit card applications in a short period of time, and this can harm your credit report, and especially hamper your chances of getting a home or personal loan.
Just as important as knowing you can repay the card on time, is knowing that you can cease your credit card spending until your balance is cleared. It is important not to spend on your balance transfer card, as new purchases will attract the higher purchase interest rate right away, and not enjoy the 0% interest of your balance transfer. For example, HSBC allocates payments to your credit card account in an order of their discretion, and will usually reduce the transferred balance first, leaving any new purchases to accrue interest and undo all of your interest free savings.
You will also need to exercise control to not spend on your old credit card, which now has a tantalising zero balance. Being in the process of repaying a credit card balance is an opportunity for you to reassess your spending habits and learn to spend less than you earn so while you don’t have to cut up your old credit card, just get control of your balance before you start working on a new one.
Posted on Saturday, October 16th, 2010 at 9:09 pm
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