Are you accumulating too much credit card debt? Is the interest too much for you to pay? Switching to a balance transfer credit card may be the best solution for you! It’s a wise decision to avoid going into a deeper financial pitfall where it may be hard to get back on track.
Before applying for a balance transfer credit card, here’s a quick guide you can use to learn the basics and how to find the best balance transfer credit card in New Zealand.
A balance transfer credit card acts just like a normal credit card, but it allows you to move your existing card debt to a different bank. It offers a lower interest rate on the transferred balance or debt for a certain grace period.
Doing this can help you repay your debt faster, as compared to sticking to your current credit card and continue to accumulate the interest. This is particularly useful when you accumulate a huge amount of debt in one bank, and you’re wishing to pay it with a lower interest rate. Do note, however, that the interest will return to the standard rate once the set duration by the bank is finished.
Balance transfer credit cards are great, but it’s not for everybody. Transferring your debt to a low-interest rate credit card — even if it doesn’t fit your financial needs — may lead to a lower credit score, more expensive fees, and scam-like deals. Here’s who can benefit from switching to a balance transfer credit card.
Most New Zealanders who have too much credit card debt can benefit from getting a balance transfer credit card. This is a great move because they can repay their debts at a much lower rate. Instead of paying a debt of $15,000 with a 15% annual interest rate, you can pay the same amount with a 0% interest rate by transferring your debt.
Having a lower interest rate on your balance transfer credit card means you can get out of debt faster! As some banks only need you to pay for the principal debt, this is a good tactic to consolidate all your credit card debt. As long as you pay within the grace period set by the bank, you won’t have to worry about incurring expensive fees.
The great thing is, there are plenty of balance transfer credit cards offered by different banks in New Zealand. However, this can also mean you may end up with a credit card that doesn’t match your financial situations. To get the perfect match for your needs, here are some factors to consider.
This refers to the interest rate of the debts transferred to the new credit card. Depending on the bank, it may vary greatly but most don’t exceed 6% p.a. Do note, however, that it only applies during the grace or promotional period set by the bank.
This is the period when low-interest rates for debts apply. It can range from 6 months to 24 months, or for the life of the balance. The longer the grace period, the better as you have more time to settle your debts.
This refers to the interest rate after the balance transfer interest rate is finished. As the name suggests, it’s the standard interest rate that your bank charges on your credit card. This can range anywhere from 9.95%-20.95% p.a.
Every credit card has an annual fee — and the same thing applies to balance transfer credit cards. Some banks opt to waive this for the first year upon opening of the account. If you want to get out of debt, opt for a credit card with a lower annual fee.
Consolidate your credit card debts and pay it with a lower interest rate! Compare the best balance transfer credit card offerings of the leading banks in New Zealand. Here’s a side by side comparison.
|Credit card||Balance transfer||Purchase rate||Cash rate||Annual fee|
|ASB Visa Light||0% p.a. for 6 months||13.5%||22.95%||$0.00|
|ASB Visa Platinum Rewards||0% p.a. for 6 months||19.95%||22.95%||$80.00|
|ANZ Low Rate Visa Card||1.99% p.a. for 24 months||12.90%||20.95%||$0.00|
|Westpac Airpoints Mastercard||5.95% p.a. for the life of the balance||20.95%||22.95%||$55.00|
|Westpac Low Rate Mastercard||5.95% p.a. for the life of the balance||13.45%||22.95%||$25.00|
|Westpac Hotpoints MasterCard||5.95% p.a. for the life of the balance||13.45%||22.95%||$25.00|
|Kiwibank Air New Zealand Airpoints Platinum Visa||1.99% p.a. for 6 months||20.95%||22.95%||$150.00|
|Kiwibank Low Rate Visa||1.99% p.a. for 6 months||9.95%||9.95%||$30.00|
|Kiwibank Zero Visa||1.99% p.a. for 6 months||13.95%||13.95%||$0.00|
|Kiwibank Platinum Visa||1.99% p.a. for 6 months||13.95%||13.95%||$80.00|
It's time to get the best balance transfer credit card for you! Avoid the slippery slope of credit card debt by going for a lower interest rate, and consolidating your outstanding balance in one account!
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