What rate does my balance transfer revert to?

Interest-free balance transfers can be a useful way to clear your debt, but what happens when the promotional offer ends and the revert rate kicks in?

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If you’re carrying a debt that’s collecting high interest, a balance transfer credit card with a promotional offer can be a great way to repay your debt without the cost of interest. However, like all good things, the promotional offer can’t last forever, and a revert rate eventually kicks in. The revert rate is usually the cash advance or purchase interest rate, and you have to pay this on your remaining balance once the introductory offer ends.

What will my balance transfer rate revert to?

Depending on your card issuer, your promotional balance transfer rate will revert to either the standard purchase rate or cash advance rate. You can see whether your bank’s balance transfer will revert to the cash advance or purchase interest rate below.

Credit card issuersReverts back toMaximum balance transfer amountMinimum Balance Transfer Amount
ANZStandard purchase rateCannot exceed 95% of your approved credit limit$100
BNZStandard Purchase rateCannot exceed 95% of your approved credit limit$500
ASBStandard Purchase rateCannot exceed 90% of approved credit limitAn amount equal to or less than 90% of your available credit limit
KiwibankStandard Purchase RateYour available (approved) balance$200
WestpacStandard Purchase Rate95% of your available balancePlease contact Westpac

When will I have to pay the revert rate?

If your balance transfer credit card comes with a promotional offer, the 0% or low interest on balance transfers is only available for a set period (usually between 6 to 12 months, depending on the card and offer). Once this promotional offer ends, you are required to pay the revert rate on any remaining balance, which is usually the standard purchase interest rate and is much higher than the promotional offer interest rate. If the cash advance rate does apply, this is generally higher than the standard rate on purchases. If you can, always try to repay your balance before the revert rate kicks in to avoid expanding your remaining debt with high-interest rates.

Always make sure to check what the revert rate is and when it will kick in before applying for a balance transfer credit card. You can find this information within the Product Disclosure Statement relevant to the card. Once you work this out, consider how much debt you have, the length of the promotional offer and how much you have to pay to consolidate the entire debt before the revert rate rolls in.

Balance transfers can be an efficient debt consolidation strategy, but you should always aim to repay the entire debt before the revert rate comes up to bite you.

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