No BT Fee Balance Transfer Credit Cards

Most banks charge a one-off 1-3% BT fee on balances transferred. Save more money and compare cards with no balance transfer fee.

Most banks charge a one-off 1-3% BT fee on balances transferred. Save more money and compare cards with no balance transfer fee.

The whole point of transferring a balance to a new card is to save money by taking up a zero-interest or low-interest introductory offer on balance transfers, usually for a period in the range six months to 36 months. So when banks impose an upfront balance transfer fee the potential savings to be made are eroded, making it more difficult to compare offers.

Some card issuers charge a balance transfer fee, some don’t

When you transfer a balance, your new card issuer incurs administration costs associated with extra creditworthiness checking, paying off the transfer amount on your old card and charging it your new one. The card issuer can choose whether to charge a fee in an attempt to recover these costs, as well as some of the profit lost by the low or zero interest rate, or forego the charge in order to make the offer appear more tempting.

Do cards with no balance transfer fee always deliver the biggest savings?

A balance transfer fee is going to add to the amount of your debt. For example, if you transfer an amount of $5,000 to a card with no balance transfer fee, your starting debt remains at $5,000. But if you transfer to a card charging a 2% upfront fee, your amount owing immediately increases to $5,100. On the face of it, it’s better to transfer to the card with no fee.

But what if you are paying 20% p.a. on your current card debt, and the ‘no fee’ card is offering a balance transfer at 0% for six months, while the ‘2% fee’ card is offering 0% for 12 months? Assuming a 2% monthly minimum repayment, the ‘no fee’ card would deliver net savings of $495, while the 2% fee card would save you $880.

So it doesn’t make sense to choose a card with a short-term balance transfer offer just because it has no balance transfer fee attached. With long-term offers, the transfer fee (or absence of fee) becomes less significant when compared with the interest saved.

Interest will be charged on the transfer fee if you don’t repay it in the first month

One reason for avoiding a balance transfer fee is that it does not form part of the interest-free or low-interest transferred balance. If you transfer a balance of $5,000, only that amount will be interest-free. Where there is no balance transfer fee to pay, there are no further charges to worry about unless you haven’t succeeded in paying off the balance by the time the introductory offer expires. But if a 2% balance transfer fee of $100 is charged, it effectively becomes a part of your purchases balance in the first month. If you don’t repay it in full on the due date you’ll end up paying interest on the transfer fee.

How to compare balance transfer offers

It’s easy to be deceived into thinking that the best balance transfer offer must be the one with the lowest interest rate (0% in most, but not all, cases) or the longest period before the promotional interest rate gives way to the revert rate (usually the card’s ongoing interest rate for purchases or cash advances). But this is not always true. No two offers are identical, and you will need to assess the cost to you of all attached fees and conditions, by asking these questions:

  • How long before the introductory rate expires? (i.e. What is the length of the offer?)
  • Is the introductory interest rate zero, or some other percentage? (Some balance transfer offers charge between 1% p.a. and 3% p.a., rather than 0%.)
  • Is there is a balance transfer fee charged?
  • If there is a balance transfer fee, what percentage is applied?
  • How much is the difference in annual fee between the old card and the new one?
  • Is there an introductory rate on purchases as well? (This would enable you to use the card for purchases and still have interest-free days even though you have an unpaid balance transfer.)
  • How much is the revert interest rate? (The revert rate is the rate applied to any remaining balance after the promotional period expires.)
  • What are the new card’s ongoing interest rates on purchases and cash advances?
  • What are the new card’s fees for items such as ATM withdrawals and cash advances, foreign transactions, late payments and emergency card replacement?
  • What percentage of your new card’s credit limit can you use up in a balance transfer? Will this be enough?
  • Is it possible to transfer a balance from your existing card to the new card you have chosen? (Most card issuers won’t let you transfer from one of their own cards, or from a card issued by another organisation within the same financial group.)

In other words, the presence or absence of an upfront fee is only one of the many features to consider when comparing balance transfer offers.

Tips for making sure your ‘No balance transfer fee’ card works for you

If you do choose a card with a balance transfer offer and no transfer fee, there are still some further actions you can take to maximise your savings:

  • Plan your repayment schedule to make sure that you repay the debt before the end of the introductory period: The easiest way is to divide the balance by the number of months for which the offer lasts, and aim to repay the resulting amount each month, rather than just the minimum monthly repayment required.
  • Try to repay more than the minimum monthly repayment: If you can’t quite manage to repay, for example, one twelfth of your debt each month during a 12-month zero-interest offer, you’re still better off repaying as much as you can each month in order to avoid the temptation of spending, and remaining in long-term debt.
  • Avoid making new purchases when you have an unpaid balance transfer: Unless there is a parallel zero-interest offer on purchases to accompany the balance transfer offer, you’re not going to receive any interest-free days on purchases until your whole debt is repaid. Any purchases you make will attract interest from the transaction date, not just from the payment due date. Even if there is a zero-interest offer on purchases, you’ll simply be running up a second debt that you may not be able to repay once the introductory period expires.
  • There are other fees you need to be aware of, or avoid: Just because you’ve avoided the balance transfer fee, it doesn’t mean that there are no other fees to pay. Unless you have a ‘No annual fee’ card (which will rarely come with a balance transfer offer) there will be an annual fee to pay at the start, and then every 12 months. Avoid cash advances and you’ll not only avoid high interest charges but also cash advance fees. Pay at least the minimum monthly repayment on time, to avoid a late payment fee. Foreign transactions, including online foreign transactions even if you pay in Australian dollars, can incur a fee of up to 3.5%.

Compare the ‘No balance transfer fee’ credit cards listed below, to find the one that will save you the most when all card features are taken into account.

My rate: 
17%
 
My annual fee: 
$90
 
Transfer: 
$5,000
 
From: 
All banks
balance transfer
BT fee
annual fee
Money saved
Virgin Australia Velocity Flyer Credit Card
Apply by 31 jan 19
14 reviews
Save money with 0% p.a. for 18 months on balance transfers. (Reverts to cash advance rate)
Earn 3 bonus Velocity Points on top of the standard earn rate for the first 3 months.
Half year annual fee of $64 p.a. for the first year.
More info
Add to comparison
18 months
0% p.a.
then 20.99%
with a 0% fee
0%
$64
1st year
then $129
Virgin Money Low Rate Credit Card
Apply by 31 jan 19
5 reviews
Low interest rate of 11.99% p.a.
10% cash back (capped at $100 total) on spend in the first 3 months from card approval.
0% p.a. for 14 months on balance transfers (reverts to cash advance rate). No balance transfer fee.
More info
Add to comparison
14 months
0% p.a.
then 21.69%
with a 0% fee
0%
$49
ongoing
HSBC Platinum Qantas Credit Card
Apply by 31 mar 19
5 reviews
Earn 1 Qantas Point per $1 spent, up to $2,500 every month. Every $1 spent thereafter will earn 0.5 Qantas Point. (Capped at 7,500 per statement period)
0% p.a. for 12 months on balance transfers with no balance transfer fee.
No annual fee for the first year. ($79 p.a. thereafter)
More info
Add to comparison
12 months
0% p.a.
then 21.99%
with a 0% fee
0%
$0
1st year
then $79
Virgin Australia Velocity High Flyer Credit Card
Apply by 31 jan 19
Earn up to 90,000 bonus Velocity Frequent Flyer Points. (Conditions Apply)
0% p.a. for 15 months on balance transfers.
Exclusive new $129 Virgin Australia Gift Voucher which cardholders get each year.
More info
Add to comparison
15 months
0% p.a.
then 20.99%
with a 0% fee
0%
$289
ongoing
Emirates Citi World Mastercard
Apply by 31 dec 18
4 reviews
Earn up to 60,000 Skyward Miles (Spend criteria applies).
One complimentary chauffeur-drive service per year to and from the airport when flying Emirates.
2 x lounge passes for you and a guest for any Emirates Lounge in Australia.
More info
Add to comparison
9 months
0% p.a.
then 21.74%
with a 0% fee
0%
$149
1st year
then $299
0% p.a. for the first 15 months on balance transfers with no balance transfer fee.
Low 12.49% p.a. ongoing rate on purchases.
Low annual fee of $58 p.a.
More info
Add to comparison
15 months
0% p.a.
then 21.74%
with a 0% fee
0%
$58
ongoing
Citi Signature Qantas Credit Card
Apply by 31 jan 19
Receive 50,000 bonus Qantas Points when you spend $2,000 within 90 days from card approval.
Redeem Points for Qantas Frequent Flyer travel, experiences and more.
0% p.a. for 6 months on balance transfers.
More info
Add to comparison
6 months
0% p.a.
then 21.74%
with a 0% fee
0%
$248
1st year
then $444
Virgin Australia Velocity Flyer Credit Card Points Offer
Apply by 31 jan 19
Earn up to 60,000 bonus Velocity Points (Spend Conditions Apply).
Save money with 0% p.a. for 18 months on balance transfers. (reverts to cash advance rate)
$129 Virgin Australia Gift Voucher which cardholders get each year.
More info
Add to comparison
18 months
0% p.a.
then 20.99%
with a 0% fee
0%
$64
1st year
then $129
Woolworths Everyday Platinum Credit Card Balance Transfer Offer
Apply by 31 jan 19
1.99% p.a. on balance transfers for 12 months and then 21.99% p.a.
Get a $50 Woolworths eGift Card* (Spend Conditions Apply).
$0 annual fee for the first year, saving you $49.
More info
Add to comparison
12 months
1.99% p.a.
then 21.99%
with a 0% fee
0%
$0
1st year
then $49
Virgin Australia Velocity Flyer Credit Card 0% p.a. Purchase Offer
Apply by 31 jan 19
2 reviews
0% p.a. for 14 months on purchases.
$129 Virgin Australia Gift Voucher each year.
Personal Concierge Service.
More info
Add to comparison
6 months
0% p.a.
then 20.99%
with a 0% fee
0%
$129
ongoing
Earn up to 0.5 pts per $1 spent on eligible purchases.
2.99% p.a. on balance transfers for 9 months.
Free worldwide emergency card replacement.
More info
Add to comparison
9 months
2.99% p.a.
then 20.49%
with a 0% fee
0%
$100
ongoing
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Q&A's about No BT Fee Balance Transfer Credit Cards from customers

Q: What is a balance transfer fee?

Balance transfer fees are now the norm for credit cards in Australia. A balance transfer fee is a one-off fee charged to you by your new credit card provider to establish a credit plan for the amount you transfer onto your new credit card from your old card. If there is a balance transfer fee charged, our comparison tables will show it and the savings calculation will factor it in. Generally, a balance transfer fee is charged straight away and will appear on your first credit card statement.

Q: Why is it that some card issuers charge a balance transfer fee and others don’t?

When you apply to transfer a balance, you are effectively applying for a loan, in addition to any credit that may be extended to you for each month’s purchases. The card provider needs to establish a credit plan, check your credit history, pay off an amount on your old card and charge it to your new one. This all takes time and costs money, and balance transfer fees are simply an attempt to recover these costs. Card issuers who do not charge a transfer fee are sacrificing profit in order to make the offer appear more tempting, but there may be other ways in which they try to recover their costs or make more profit. That’s why it’s important to compare all features of the offer.

Q: Is it worth paying the balance transfer fee?

Many banks charge a one-off handling fee for doing a balance transfer. This balance transfer fee typically ranges between 1% to 3% of the amount you transfer and it is charged upfront when you are approved for the new card. If you transfer $5,000 to a card with a 1% BT fee then you’ll be charged $50 for doing the balance transfer. This is in addition to the annual fee, which is a separate charge. To make it easy to see if it is worth paying the balance transfer fee, Credit Card Compare’s comparison tables have included the balance transfer fee (for cards that charge the fee) in the calculation of your potential savings.

You can see the calculations in the ‘Money saved’ column on our ‘Balance Transfer Credit Cards’ pages, where it’s also possible to sort cards in order of the net amount saved.

Q: Do cards with no balance transfer fee always deliver the biggest savings?

Not necessarily. In most cases the interest savings will far outweigh the transfer fee. So with a long-term balance transfer, of 12 months or more, a transfer fee is a much smaller proportion of the interest amount saved.

Consider a situation where a $5,000 debt is being transferred from a card where it was incurring interest at 20% p.a. A 2% minimum monthly repayment is required by the new card, and both the old and new card have the same annual fee.

  • Case 1: Introductory offer is 6 months at 0%, with no balance transfer fee. Total interest saved = $495.
  • Case 2: Introductory offer is 12 months at 0%, with a 2% balance transfer fee. Interest saved = $980. Transfer fee = $100. Net saving = $880. The transfer fee is equal to around 10% of the amount saved in interest.
  • Case 3: Introductory offer is 24 months at 0%, with a 2% balance transfer fee. Interest saved = $1,918. Transfer fee = $100. Net saving = $1,818. The transfer fee is equal to around 5.5% of the amount saved in interest.

Therefore, the shorter the zero-interest period is, the more important it is to avoid a balance transfer fee. Conversely, the longer the zero-interest period is, the less significant the transfer fee becomes. Ideally of course, look to maximise your savings by trying to find a long-term offer at 0% with no balance transfer fee.

Q: What other card fees and charges should I consider when comparing balance transfer offers?

Although you may be saving money by not paying a balance transfer fee, before you make your decision you should also look at the following fees and charges which you may incur on your new card:

  • Annual fee
  • Purchases interest rate
  • Cash advance interest rate
  • Cash advance transaction fee
  • Revert interest rate (interest rate charged on any remaining amount of the transferred balance, after the introductory offer expires)
  • Foreign transaction fee
  • Late payment fee
  • Emergency card replacement fee

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