Move your credit card debt onto a new card at 0% interest for 12-26 months, giving you the longest time to pay it off.
If you’ve wound up with a large outstanding credit card debt that you want to pay off, you have choice to make. Either you can do the shuffle from one 0% balance transfer offer to another every 6 – 12 months, or you can secure a low rate of interest for a much longer term. If you want to save the most amount of money possible and are prepared to dance between banks, then long term balance transfers are not for you. However, if you are the sort of person who likes to know how much money they have available and would rather pay off debt less aggressively over a longer period of time, then these long term balance transfer offers are probably what you need.
Matt had been living large and loving life. Having built up $10,000 on his card Matt paid the minimum repayment of $200 towards lowering his balance. But with 20% p.a. interest card at such a slow pace it was going to take Matt over 8 years to pay it down to $0.00.
Something had to give, mainly, his old card. He compared his options and finally, Matt switched to a 0% interest balance transfer card.
Now he’ll avoid about $2,000 in interest repayments over the course of 24 months. In plain English: that’s $2,000 that can go to paying off Matt’s debt in full, not his credit card interest.
Broadly speaking, there are two attitudes towards debt that we all fit into. The first is that you are completely fed up with being in debt and are prepared to do and endure anything to get out of it, fast! If you are one of these people, then you’d probably be better off exploring our hand picked choice of 6 month balance transfer cards. The second attitude is to be less impulsive and more planned. You are the type of person who prefers a fixed rate home loan and doesn’t mind paying a little extra so that you have a fixed amount of money you can work around. If you would rather repay your debt steadily over time, then a long term offer is much more suited to you.
Based on our database of cards, we’ve calculated the average balance transfer promotional interest rate to last for approximately 6 months. Long term offers tend to be in the region of 12 – 15 months.
As is the case with practically every balance transfer offer, it’s all about saving money. The longer a promotion lasts for and the lower the rate on offer, the more money you stand to save.
Yes, generally the longer the balance transfer offer period, the higher the interest rate tends to be. You’ve got to work out how much money you would save based on the size of your balance and the interest rate you’d get. However, your personal habits also come into play. Some people just prefer knowing that they have a low interest rate locked in for a long period of time, which means they can plan ahead to be debt free when the promotion ends.
If you want to apply for one of these cards, you have to meet the bank’s requirements. You’ll typically need to be a high earner with a proven record of consistent monthly repayments who wants to transfer a large balance.
That really does depend on your personal financial situation. If you are transferring a relatively small balance in comparison to your income, which you can pay off quickly, then spending sensibly will probably not get in the way of you paying off your debt. The issue is when you transfer a large balance (probably built up after spending frivolously) and continue to spend. This behaviour will mean you probably won’t get rid of your debt as you will continue to add to it. As a general rule of thumb, only buy what you can afford to begin with and if you’ve applied for a balance transfer card in order to pay back your debt, then don’t use it to purchase things with.