Balance Transfer Showdown: Australia vs. the UK

The popularity of the balance transfer card is undeniable. With low or zero interest introductory periods lasting for several months, the balance transfer is one of the easiest ways to radically reduce your monthly outgoings and start to get your debt repaid. In Australia they are extremely popular and have long been the most popular type of card available on our site. The same can be said of the UK where the balance transfer card rules supreme. But, as we’ve previously discussed here on The Credit Letter, all is not even between the two countries. We may have a superior climate and have a knack of beating the poms at the sports they invented, but when it comes to balance transfers the UK is way ahead. Just how far ahead they are will be revealed below.

Balance Transfers in Australia

Broadly speaking, there are two distinct categories of balance transfers available in Australia: those with no interest and those with interest. However, the number of 0% balance transfer offers available on the market is vastly outnumbered by those charging interest. Here are some statistics for you:

• Number of 0% balance transfer offers: 6
• Number of low interest balance transfer offers: 58
• Average balance transfer interest rate: 3.38% p.a.

So generally speaking, while balance transfers are practically omnipresent in Australia, that’s not to say the rates and durations on offer are the best they could be. It’s fair to say that interest free balance transfers are not the norm here, but ‘cheap’ balance transfers are. And by cheap we mean in the range of 1-3%. In terms of the duration of introductory balance transfer offers, in Australia they range from 3-15months.

One thing that Australia does have going in its favour is the widespread lack of balance transfer fees. Most banks do not charge an administrative fee to transfer your existing balance to your new card, which can save you a lot of money.

All in all, Australian balance transfers are more likely to have a low interest rate and an introductory period in the region of 6-12 months.

(Please note that these figures are based on Credit Card Compare’s range of offers at the date of publishing and are therefore subject to change.)

Balance Transfers in the UK

The credit card market in the UK is notoriously competitive. There are more people living in the UK, so it follows that the market is bigger, more lucrative and thus fiercely cut-throat. It’s not uncommon for ‘wars’ to break out between banks with each trying to beat the other with better offers. Balance transfers are extremely popular in the UK, just as they are in Australia. However, that’s where the similarities end. The market in the UK is so competitive that 0% balance transfers are the standard with the offer’s duration being the distinguishing factor. Here are some numbers to compare:

• Longest 0% balance transfer offer: 21 months
• Shortest 0% balance transfer offer: 3 months
• Typical balance transfer fee: 3%

Consumers in the UK have access to some of the best balance transfer deals in the world. Barclaycard are currently leading the charge with their 21 month 0% offer, which up until recently was for the incredibly long period of 24 months. Most zero per cent offers are for at least 12 months, but many are for much longer. There are many short term offers available too, but most people go for the longest offer they can get. Why? Well, in the UK it is standard to be charged a fee when switching cards, unlike here in Australia. This fee is typically in the region of 3%, so when you’re transferring a few thousand pounds it quickly adds up. And if you don’t pay off your debt and have to switch accounts again once the introductory period is over, then you’ve got to pay another fee.

(Please note that these figures are based on the range of balance transfer offers from FinanceChoices.co.uk at the date of publishing and are therefore subject to change.)

Who Wins?

A side-by-side comparison of the interest rates and offer durations between the two country’s markets reveals that the UK is the clear winner. With a massive number of interest free offers lasting for well over a year, what’s available in Australia (at best 0% for 9 months with the Virgin Flyer) just doesn’t compete. At least we don’t get charged a fee to transfer a balance!

Australia’s Top Currently Available Balance Transfer Offers

	Credit Card Offer	Purchase Rate (p.a.)	Balance Transfer (p.a.)		Annual Fee	Apply now
			rate	period
	St.George Vertigo MasterCard Low interest rate & long balance transfer deal. Fast 60 sec approval.	13.24%	0.99%	12 months	$55	Featured Card more info
	Aussie MasterCard Cheap low interest rate balance transfer credit card. Apply and get a decision in 60 seconds.	9.99%	2.99%	12 months	$49	Editor’s Choice more info
	HSBC Credit Card No annual fee. 0% on balance transfers for 6 months. Access to offers, discounts and benefits.	17.99%	0%	6 months	$0	Editor’s Choice more info

Related posts:

1. Saving Money with Balance Transfer Offers
2. Can You Transfer Multiple Balances to One Balance Transfer Card?
3. Short Term 0% Interest vs. Balance Transfer for Life?
4. When Should You do a Balance Transfer?
5. The Benefits of Long Term Balance Transfer Credit Cards