Ask Miles: How can I get ahead after spending lots on my credit card at Christmas?

Ask Miles: How can I get ahead after spending lots on my credit card at Christmas?

How can I get ahead after spending lots on my credit card at Christmas?


Firstly, don't kick yourself for any financial decisions made in December. It's easy to overspend and it's even easier to do so in the name of gifts and giving. However, regardless of the reason behind your spending, you still need to meet your minimum repayments – which is where things often get tricky.

January can be an expensive month. From school holidays to surprise bills, paying the minimum repayments can be tough. Luckily, January accommodates for this and is a month full of great balance transfer offers designed to help you get ahead and clear your credit card debt. 

How can a Balance Transfer Credit Card help?

In short, a balance transfer credit card helps reduce your interest payments so you can save money and get out of debt faster. Generally speaking, you'll transfer your debt from one (or two) credit cards onto your new card. 

Here's how it works:

1. Transfer your debt from one or two credit cards to your new balance transfer credit card.

2. To transfer the debt, you'll either pay nothing or a percentage of the amount you transfer. Of course, it's best to find a 0% fee. 

3. Now is the best time to close your old credit card(s) to avoid utilising too much credit.

4. If your card comes with 0% p.a. for 22 months on balance transfer, then you'll pay no interest on your transferred debt for that period of time. This is when it's best to knuckle down and pay off as much as possible so you can improve your credit score and get ahead.

0% p.a. for 16 Months on Balance Transfers

With no balance transfer fee.
Westpac Low Rate Credit Card
38 reviews

0% p.a. and no balance transfer fee for 16 months on Balance Transfers. Reverts to variable cash advance rate.

Low purchase rate of 13.74% p.a..

Tap & go™ quickly and easily using your Mastercard® for a faster transaction.

Low minimum income threshold of $15,000 needed for eligibility.

Promotion. Credit criteria, fees and charges apply. Read the terms and conditions before making a decision.
Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

This credit card offer is subject to change and may not be directly related to the content of this article.

Why should I pick one Balance Transfer Credit Card and not another?

Great question! It depends on your needs, so here are the main things to take into consideration:

  • How long the 0% p.a. on balance transfers offer lasts for
  • If you need to pay a one-off balance transfer fee eg. 1% of the balance transferred
  • What the purchase rate is
  • How much you'll fork out for the annual fee 
  • If the other perks are good eg. can you earn Frequent Flyer points, does it come with travel insurance etc

Unfortunately, you'll never hit a hole in one and get the best of all of the above. This means you'll need to pick what's most important for your financial situation. 

0% on Balance Transfers for 22 months!

with 0% Balance Transfer fee
HSBC Platinum Credit Card Balance Transfer Offer

0% p.a. on balances transferred for 22 months, with no balance transfer fee.

$129 p.a. annual fee which is refundable each year when you spend $6,000 on eligible purchases.*

Earn 2 pts per $1 spent on overseas purchases.

Earn 1 Rewards Point per $1 spent.

High credit limit for bigger spenders.

This credit card offer is subject to change and may not be directly related to the content of this article.

I've got a lot of debt, what should I look for?

Whether you're transferring a balance from one credit card or two, you'll have different needs if you have a lot of debt. This means you should definitely acquire a card with a longer period of 0% p.a. on balance transfers. By doing this you'll be able to chip away at your debt without paying more interest. 

Note: You should also opt for a card with a lower (or no) annual fee. There's no point in paying a high annual fee in exchange for perks like travel insurance etc if your main priority is paying off debt. Also, whatever you do, avoid making purchases with your new card as you'll often be hit with a high purchase rate eg. 20.74% p.a. on purchases – not a wise move when paying off old debt. 

I don't have a lot of debt, but I'd like to earn points or at least get extra perks. Is this possible?

It's very possible! However, you more than likely will need to cough up more change as the annual fee is normally higher eg. $199 and upwards. You can transfer debt from an old credit card(s) to your new balance transfer credit card and earn points on new purchases made eg. receive 120,000 points when you spend at least $1,500 each month for the first 6 months.

Note: you will not earn points on the debt you transfer from your old card(s) to the new one. 

Also, be aware, the purchase rate is normally higher at around 20%. That being said, if you pay your balance off in full each month then you'll avoid being hit with the high purchase rate. 

Picking a Frequent Flyer balance transfer offer credit card is great for anyone with a manageable amount of debt. It means you'll get lots of perks (like airport lounge access) but equally can afford to pay the higher annual fee while being ok with the fact you'll get a shorter period of 0% p.a. on balance transfers. 

Receive up to 120,000 bonus Qantas Points!

Terms and conditions apply
Qantas Premier Platinum Credit Card

Receive up to 120,000 bonus Qantas Points (20,000 points per month for the first 6 months) when you spend at least $1,500 each month.

Reduced annual fee of $199 p.a. in the first year ($299 p.a. thereafter).

Enjoy 6 months interest-free on your first purchase of selected Qantas products and services.

2 complimentary Qantas Club lounge invitations per year.

Citigroup Pty Limited ABN 88 004 325 080 AFSL No. 238 098 Australian credit licence 238098, is the Credit Provider and Issuer of the Qantas Premier credit cards on behalf of Qantas Airways Limited ABN 16 009 661 901.

This credit card offer is subject to change and may not be directly related to the content of this article.

Finally, how do I know if I'm eligible for the card?

It's easy, just go to the card you're interested in on our website and check the minimum income requirement, minimum age and required credit rating. If you aren't a permanent resident or citizen, you'll also need to check if you're eligible. 

Free Credit Score Tool

Finally, the best thing you can do is to check your credit score before applying for any credit card. By doing this you'll see what the banks see and can apply for a credit card knowing if you'll be likely to get it or not. 

Not only is this secure and free, by checking your credit score you will not damage your credit score as our Free Credit Score Tool is powered by Experian. Even if you aren't in need of a credit card, knowing your credit score will help as you plan to buy a house, apply for a personal loan or even buy a car on finance. 

If the banks know your credit score, you should too. Get yours for free today!

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The products, banks and companies mentioned in this Ask Miles question and answer were correct at the time of publishing. The information published is general advice only and should not be taken as specific personal finance advice.