Life time balance credit cards
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Hi,
I've got a question about 'life time balance transfers', I've looked through the articles so thought you might help. Brief background - I have a good rating and fairly good income but also a personal loan from when I got married.
The loan is at the normal standard variable rate and I pay on time every month. My question is would I be better off getting one of the credit cards that offer low life time balance rates (citibank etc.) around 4.9%?
On the face of the % rates it looks like the credit card is the way to go (if I dont add purchases on top) but am I missing something?
Any advice would be great, thanks!
Hi Gez,
It depends on the bank. For many banks, balance transfer offers are subject to approval. Some will only accept a balance transfer from another credit card. Most require you to be a new customer.
If you can find and be approved for a good balance transfer offer (incidentally, you mentioned 4.9% -- Suncorp offer a lifetime balance transfer of 3.9% on their Platinum card) with a large enough credit limit you can save a lot in interest.
Be mindful though that the minimum repayment on a credit card is probably a lot less than your fixed repayments for your personal loan. If you're repaying less, the loan will take longer to terminate and you may end up paying more in the long-run. Obviously, you can repay more than the minimum, so you'll need to be confident you have the discipline to do so.
Talk it over with your bank or financial planner first -- I've never heard of someone doing this so there may be other pitfalls I'm not aware of.
Good luck.
It depends on the bank. For many banks, balance transfer offers are subject to approval. Some will only accept a balance transfer from another credit card. Most require you to be a new customer.
If you can find and be approved for a good balance transfer offer (incidentally, you mentioned 4.9% -- Suncorp offer a lifetime balance transfer of 3.9% on their Platinum card) with a large enough credit limit you can save a lot in interest.
Be mindful though that the minimum repayment on a credit card is probably a lot less than your fixed repayments for your personal loan. If you're repaying less, the loan will take longer to terminate and you may end up paying more in the long-run. Obviously, you can repay more than the minimum, so you'll need to be confident you have the discipline to do so.
Talk it over with your bank or financial planner first -- I've never heard of someone doing this so there may be other pitfalls I'm not aware of.
Good luck.
I was offered a credit card with a 2.9% lifetime balance transfer from my credit union. I was able to balance transfer $20,000 from a line of credit attached to my mortgage onto this offered card saving me 4%! (the line of credit is at 6.9% )
so yes, they do allow it.
so yes, they do allow it.
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