A successful home loan application requires proof of a good savings history and a good credit record. See our tips on how to improve it.
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 six balance transfer things to think about before you make the call.
Give me the main points
- A balance transfer takes 5 to 10 business days to go through.
- Usually there’s a limit on how much you can transfer to your card.
- The special promotional rate is for a limited time and unpaid balance transfer amounts will revert to the card’s standard cash advance rate at the end of the promotional period.
- You get no interest-free days on purchases when you make a balance transfer.
- Minimum monthly payments to your credit card are required even when you have a promotional rate on transferred balances
- A debt consolidation personal 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, you'll need to keep up your payments in accordance with the old card’s terms and conditions; otherwise you might end up paying extra fees and interest.
If you have transferred the full balance, you can choose to cancel your old card if you wish.
2. LIMITS APPLY TO BALANCE TRANSFER AMOUNTS
The amount you can transfer to your card is often a percentage of the card’s credit limit. It can vary between banks so you’ll need to check this.
For a new NAB card account: Balance transfer applications within the first 30 days of opening a new card account may request to transfer up to a maximum 90% of the available credit limit (less any applicable annual card fee or balance transfer fee).
For an existing NAB card account: Balance transfer applications after the first 30 days of opening a new card account may request to transfer up to a maximum 100% of the available credit limit (less any applicable annual card fee or balance transfer fee).
3. Special interest rates end
If there’s a special offer—with a promotional rate— attached to the card, it will usually only last for a set period. Make sure you know how long you've got left on your promotional rate before the interest on your balance transfer goes up. Obviously it’s best to pay it off before the promotional rate ends.
Also check how your bank calculates interest at the end of the promotional rate period. With us, after the promotional period, any unpaid balance transfer amounts will revert to the card’s standard cash advance rate. 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 on purchases don’t apply
If you've transferred a credit card balance to your NAB credit card, you won’t have interest-free days on purchases while you have a balance transfer. We calculate interest on your balance transfer (at the promotional rate) from the first day you make the transfer. When the promotional rate ends, any unpaid balance transfers will revert to the card’s standard cash advance rate.
So if you have a balance transfer and you use your credit card for purchases, your card’s standard purchase rate will apply from the day you make the purchase.
Your interest-free days will be available on your purchases if the closing balance is paid off in full by the due date each month. The closing balance includes any unpaid balance transfer amounts (including applicable fees and interest).
5. Minimum monthly payments are required while you have a balance transfer
Regardless of your promotional rate, you must make your minimum monthly payment by the due date each month for your promotional rate to continue.
This applies even if you have a 0% p.a. promotional balance transfer rate.
Your total minimum monthly payment is shown on your statement along with the due date. If you miss a payment or are late, you may be charged a late payment fee.
6. 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 promotional 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?