If you want a credit card balance transfer, make sure you know what you’re applying for. It’s important not to get caught out. Here are five balance transfer things to think about before you make the call.

Give me the main points

  • A balance transfer takes two to four weeks to go through.
  • Usually there’s a limit on how much you can transfer to your new card.
  • The special introductory rate is for a limited time. Find out what rate it then reverts to.
  • You get no interest-free days when you make a balance transfer.
  • A debt consolidation loan might be a better option in some cases.

Before we get started, make sure you’ve read Is a balance transfer right for you? It covers off the basics.

1. Balance transfers are not instant

Transferring your balance can take a while—usually around two to four weeks. During this time, your old card will still be active. You'll need to keep up your payments until the transfer takes place, otherwise you might end up paying extra fees and interest.

Once the transfer's done, you’ll need to cancel your old card (if you haven’t already). There’s no point transferring the debt if you start using your old card again.

2. Transfer amounts are limited

The amount you can transfer to your new card is often a percentage of the card’s credit limit. It can vary between banks so you’ll need to check this.

Our cards have a maximum balance transfer of 90%. What does that mean in practice? If your new credit limit is $1,000, you can only transfer $900 from another credit card. Just bear in mind that buying things affects paying off your transferred balance. We'll explain this more in point four.

3. Special interest rates end

If there’s a special deal—an introductory rate— attached to the card, it’ll only last for a set period. Make sure you know how long you've got before the interest on your balance transfer goes up. Obviously it’s best to pay if you can pay it off before the introductory rate ends.

Also check how your bank calculates interest at the end of the special rate period. Be sure to read the fine print.

You can see interest rates for our credit cards in our credit card comparison table.

4. Interest-free days don’t apply

If you've transferred a credit card balance to your NAB credit card, there’s no interest-free period. We calculate interest on your balance transfer (at the special rate) from the first day you make the transfer.

Interest-free days don't apply for anything (including purchases) until you've paid your transferred balance. So if you use your credit card to buy something, interest starts from the day you make the purchase. And it’ll be calculated at the purchase interest rate, not at the lower balance transfer rate.

Pay off your balance transfer, plus any purchases made during the balance transfer period, as soon as you can. Once you've done this, you’ll get your interest-free days on purchases as per normal.

5. A debt consolidation loan might be better

If you've transferred your balance to a new card but can’t get back to zero within the special interest rate period, consider applying for a personal loan.

For more on this, have a read of Is a debt consolidation loan right for you?

Or find out more about applying for a balance transfer.

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