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Balance Transfer Credit Cards

Pay off your debt faster with these low or 0% interest balance transfer credit cards.

Do you want to save on interest and pay off your debts? You can apply for a balance transfer credit card and pay it off at 0% or a low-interest rate.

Use our guide to find out more about how this works, what to consider and how to compare balance transfer offers.

Compare all credit cards

Name Product Purchase Rate Interest Free Period Annual fee
ASB Visa Light
13.5% p.a.
Up to 55 days on purchases
$0
0% p.a. interest for 6 months on any purchase of $1,000 or more with ASB Smart Rate.
ASB Visa Platinum Rewards Credit Card
19.95% p.a.
Up to 55 days on purchases
$80
Earn 1 True Rewards dollar for every $100 spent. True Rewards dollars can be redeemed at partner stores like BP, Farmers and Mitre 10.
TSB Visa Classic Credit Card
18.5% p.a.
Up to 55 days on purchases
$30
Pay 0% interest for the first 6 months on all balance transfers.
ANZ Low Rate Visa Credit Card
12.9% p.a.
Up to 55 days on purchases
$0
Balance transfer offer: Pay 1.99% p.a on balances transferred for the first two years. Ts&Cs apply.
Westpac Airpoints Mastercard
20.95% p.a.
Up to 55 days on purchases
$55
Earn 1 Airpoint Dollar with every $120 spent and get 55 days interest-free credit on all purchases.
Kiwibank Low Rate Visa
9.95% p.a.
Up to 55 days on purchases
$30
1.99% on balance transfers for 6 months.
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What is a balance transfer credit card?

A balance transfer card acts just like a standard credit card but allows you to move your existing card debt from a card at a different bank. It offers 0% or a low-interest rate on the transferred balance for an introductory period or the life of the balance.

A balance transfer can save on interest, and you can repay your debt faster than if you keep it on an existing card. If you have a balance transfer card with a promotional interest period and cannot repay your entire debt before this ends, you are charged a higher interest rate for the remaining balance. This rate is usually the same as the standard purchase interest rate on the new card.

  • The 0% or low promotional interest rate usually runs for a fixed period, which in New Zealand is typically 6 months, although ANZ does offer a balance transfer for 24 months. Once this period is over, a higher standard rate applies. Westpac is currently the only bank in New Zealand to offer a lower balance interest rate for the life of the transferred balance.
  • With most new cards, you need to pay an annual account fee. Annual fees typically range between $20-$390 depending on the card’s perks and benefits. Some low-interest cards don’t have an account fee, and some cards waive the first year’s fee.
  • There are restrictions on how much debt you can transfer to your new card. Banks often state a minimum amount between $100 and $500, and you may only be able to transfer a percentage of the available credit limit on your new card such as 95%.
  • You can save hundreds of dollars in interest if you manage your payments well and pay off your balance during the no or low-interest period.

Despite these conditions, a no or low-interest rate means you can save a lot when repaying your credit card debt.

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Getting a credit card with a 0% or very low-interest rate can be a good option if you can pay off the card during the introductory period. If you think it will take longer, a personal loan is also worth considering.

If you don’t qualify for an interest-free balance transfer on a credit card or have multiple debts that are getting on top of you, a debt consolidation loan may help you save on interest with one repayment to worry about.

An example: 0% balance transfer card vs paying off a standard credit card

To help you figure out whether a balance transfer card could save you money (and time), we’ve compared a common balance transfer offer against one with monthly repayments on a standard credit card. We assume that both cards annual fee is the same, and no new purchases are being made.

0% Balance Transfer CardStandard Credit Card
Current balance$2,728$2,728
Interest rate0% p.a.17.00% p.a.
Period or term12 monthsOngoing
Balance transfer fee1.5%N/A
Monthly repayment$230.74$230.74
Time to pay off12 months14 months
Interest paid$0$278.75

In this example, a credit card balance transfer will save you $278.75 in interest, and you’ll pay off your debt two months faster – even while making the same monthly repayments and forking out for a balance transfer fee. You can use our credit card repayment calculator to determine how much you could save and set your repayment goals.

How to choose the right card

There are plenty of balance transfer card deals available in New Zealand, so how can you pick the right one? These are the crucial features you should compare when looking for maximum savings:

  • Balance transfer interest rate. This is the interest rate that is charged on the balance transferred to your new card. The Co-operative Bank and ASB currently offer 0.0% for 6 months on their cards, while Kiwibank charges 1.99% for 6 months. With the ANZ Low Rate Visa, the interest charged on your transferred balance is 1.99% p.a for 24 months. Westpac has a higher rate of 5.95% p.a., but this rate applies to the life of the balance rather than a promotional period.
  • Promotional period. The promotional period refers to how long the 0% or low-interest-rate applies. Depending on the card, this could range from 6 to 24 months, or for the life of the balance. The longer the promotional period, the more time you have to clear your debt and save on interest.
  • Standard interest rate. After the promotional period ends, the remaining debt is charged interest at the higher standard interest rate. This typically ranges from 9.95% to 20.95% p.a. – but please be aware that rates can vary depending on the type of card. If you don’t think you can repay your entire debt before the promotional period ends, you should look for a card with a lower standard rate to minimise your interest costs or opt for a card with one interest rate for the life of the balance.
  • Annual fee. Most cards charge an annual fee, starting from when the account is opened. Some credit card issuers waive this for the first year. The annual fee is treated as a purchase and incurs the same interest rate as other purchases you make with the card. Cards with higher annual fees come with more benefits, but if you are looking to save and pay off your debt, it may make more sense to stick with the lowest fees possible.
  • Interest-free purchase period. Some credit cards come with an interest-free period of up to 55 days for purchases. However, there are usually conditions such as having no balance transfers and paying your previous statement closing balance in full. While this feature won’t be of benefit as you are paying off your debt, you may be able to take advantage of it in the future.
  • Other benefits: Cards may offer additional benefits such as earning rewards or free travel insurance for travel booked on the card. These may help you reach a conclusion but shouldn’t be the deciding factor when comparing balance transfer credit cards. These benefits are often available on cards with higher interest rates and account fees.

How to carry out a balance transfer in 4 steps

compare balance transfer offers1. Compare balance transfer offers
Use the table above to compare offers and see how much you could save.
apply for a new balance transfer card2. Apply for a new card
Read the requirements, gather your documents and request the balance transfer during the application.
activate your new credit card3. Activate your new card
When you receive the card, activate it by phone or online (and start making repayments).
close your old credit card4. Close your old account
You are not required to close your old account, but this is usually a good idea to help you stay out of debt.

Quick tips for making the most of your balance transfer

  1. Make sure you can transfer enough of your balance. It doesn’t have to be 100%, but if you have to split your balance, make sure you can manage both cards.
  2. Pay off the full balance before the end of the promotional period (auto-payments can help). This way, you avoid the higher revert interest rate.
  3. Don’t spend on the new card, then your repayments go towards your balance transfer, and you won’t add to your debt.

Pros and cons of balance transfer credit cards

Balance transfer credit cards can be a useful tool to help you pay off existing debt and clear your balance faster. However, there are some potential downsides to these offers. Make sure you consider all the pros and cons that are relevant to your situation.

Pros

  • Save on interest costs. You can transfer your existing balance to a new card and get a 0% or low-interest rate for an introductory period. This rate is almost always lower than the interest rate you’re currently paying and saves you money on interest charges.
  • Pay off debt faster. By paying a lower interest rate or not paying any interest on your balance, you should be able to pay it off much faster because the amount won’t creep up (or is a lot less) month after month.
  • Simplify your payments. If you have a few debts, you can use a balance transfer card to consolidate them, so you only have to keep track of one credit card bill. Not only does this help you manage your debt, but it can also save you money on annual fees and other card costs.
  • Complimentary extras. If you want to use the card after paying off your balance, perks like travel insurance or rewards could help you get more value out of the card in the long run.

Cons

  • Balance transfer fee. This is a one-time fee that you may have to pay to move your balance to the new card. These fees can range from 0% to 3% on your balance transfer amount, which could mean a fee of $150 on a $5,000 debt.
  • Revert rate. If you don’t pay off your balance in full during the introductory period, this is the interest rate you pay on the remaining balance. Typically, it is higher than the purchase interest rate.
  • Balance transfer limits. Depending on the card and how much debt you want to transfer, you may not be eligible to move it all onto the new card. You could still be saving money, but you also have to manage your existing card.
  • Credit score impact. Every time you apply for a new credit card, an enquiry is recorded on your credit report. If you already have a weak credit score, this could decrease it further, and you may not receive approval.

Avoid these balance transfer mistakes

Used intelligently, a balance transfer card reduces your interest payments and gets you out of credit card debt faster. Used the wrong way, your debt can increase.

Ensure you don’t get trapped in balance transfer debt by avoiding these mistakes:

1. Forgetting you still have to make payments

Even if there is a promotional period, with a 0% or low-interest rate, you still have to make at least the minimum payment each month. You can’t simply apply for the balance transfer and then stop making payments on your debt. The minimum repayment is usually stated as between 2% to 5% of the outstanding balance, or $5 to $25, whichever is greater.

2. Not checking the standard interest rate

Once your balance transfer promotion finishes, you pay the standard interest rate on the remaining balance. When you compare credit cards with balance transfer promotions, aim to choose a card with a standard purchase rate that is lower than your current credit card rate. Alternatively, make sure you repay the entire debt before the standard rate kicks in.

3. Not prioritising payments to the balance transfer debt

Unless you have other more expensive debt that you are trying to pay off, you should prioritise your balance transfer debt to get it paid off before the end of your low or no-interest period.

4. Only making the minimum payment

If you are only paying the minimum repayment each month, you won’t repay the entire balance by the time the balance transfer offer ends. Then your debt starts to collect interest and increase. Instead, it is best to calculate exactly how much you need to pay each month to repay the entire balance by the time the interest-free period ends.

You can do this by dividing the size of your debt by the number of months in the balance transfer offer. This gives you a repayment goal to meet every statement period to clear the debt before the promotion ends.

The key lesson? Budget as much as you can towards paying off your credit card debt while the promotional rate applies. If you haven’t paid everything off, it is possible to apply for another balance transfer.

5. Keeping your old card open

It is tempting to hang on to your old card “just in case”. Realistically, if you have run up debt on it before, you are likely to do so again. Cancel the card, cut it up and concentrate on paying off the balance.

Remember to transfer any regular payments and check with your bank if there is any outstanding fees or interest charges before you forget about it completely.

Frequently asked questions

Balance transfer credit cards can help you save on interest costs and get your debt under control. As there are plenty of balance transfer cards on the market, there is no one best option that works for everyone. Instead, look at the size of your debt, what you can afford to pay each month and the card’s features to find a balance transfer card that works for you.

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