Boat Loans Australia :: Articles

Infestation of sweet deals

What should I know about balance transfers and their potential pitfalls?

Infestation of sweet deals

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

They look like an easy solution to your credit card debt ... but balance transfers come with complex arrangements that can add to your woes.
Consumers are switching to credit cards with low balance-transfer rates in a bid to pay off debt faster but unless they go into these arrangements with their eyes open they might find the deal they get is not what they expected.

They need to make sure the interest rate they pay at the end of the introductory period is the normal purchase rate and not a higher rate.

More particularly, they need to recognise that any spending on the new card will attract interest immediately at the standard rate, not the lower balance-transfer rate, and could negate much of the benefit they get from the low-rate offer.

The chief executive of the banking industry research group InfoChoice, Shaun Cornelius, says there has been a lot of inquiries about balance-transfer offers on the company's website.

"Balance-transfer deals are the most popular cards on the site," Cornelius says.

"People want to get their debt down and they see the low interest rates on these products as a way of doing that.

"In other cases they are dealing with household debt stress and they are looking for a repayment holiday."

Cornelius says using a balance-transfer offer to pay debt faster makes sense but it has to be the right offer and the card holder has to be disciplined about how the card is used.

He says that if people are trying to reduce credit card debt, they should be looking for a card that offers a low rate as a long-term option.

The accompanying balance-transfer cards table shows all the low-rate cards in the market with balance-transfer offers. What is important to note is that of the 13 options available, four revert to the higher cash-advance rate. They are Citibank's Clear Platinum, National Australia Bank's Low Rate Visa, Commonwealth Bank's Low Rate Credit Card and Westpac Low Rate.

In the case of the Citibank card, for example, the issuer offers six months at zero interest and then any outstanding balance would start to accrue interest charges at the cash-advance rate of 20.74 per cent, not the 10.99 per cent purchase rate.

Cornelius says card holders should make it a rule that if they take up a balance-transfer offer they should not make any purchases on the card during the offer period.

"The way these offers work is that the balance you transfer on to the new card is paid off first," he says. "All new purchases accrue interest at the reversionary rate from day one and that balance is not touched until the balance you have transferred is paid. You need to avoid spending on the card during that period. An option is to have a second card for spending so that you don't have to touch the balance-transfer card."

Cornelius says that if consumers avoid cards that revert to a cash-advance rate and follow the rule about not spending during the offer period, they can save money.

The balance-transfer savings table shows the outcomes for a number of different card offers. Assuming a $10,000 balance transfer and no additional spending, the interest savings can be anywhere from $1402 to $4389, depending on the terms of the deal.

The balance-transfer offers that last for six months and then revert to a purchase rate about the average of 17.9 per cent provide the lowest interest savings. The consumer would be better off skipping the balance transfer offer and opt instead for a low-rate card.

Cards that revert to low rates at the end of the balance-transfer period offer a much better saving.

According to the InfoChoice data, the biggest saving comes from cards that offer a balance transfer rate "for life" (that is, the rate continues until the transferred balance is paid off). These issuers include Australian Central Credit Union, Citibank (Platinum and Emirates Citi Platinum cards), Community CPS, CUA, IMB and United Community, which all offer 4.9 per cent for life.

Cornelius says something else to pay attention to is what happens to the old card. Some card issuers will automatically close the old card account when they make the balance transfer.

Others leave it up to the customer to decide what to do with the old account. Leaving the old account open may become a problem for people who are trying to cut down their debt.

Published: Wednesday, 1st Jul 2009
Author: 142


Boat Loans Articles

From Dreams to Reality: Choosing the Right Boat Loan for First-Time Buyers
From Dreams to Reality: Choosing the Right Boat Loan for First-Time Buyers
Owning a boat is a dream for many Australians, offering an opportunity to explore the country's stunning waterways, enjoy recreational activities, and create lasting memories with family and friends. - read more
Boat Maintenance 101: Tips to Keep Your Vessel Ship-Shape
Boat Maintenance 101: Tips to Keep Your Vessel Ship-Shape
As a boat owner, it's crucial to understand the importance of routine maintenance to keep your vessel in good condition. Neglecting maintenance can lead to costly repairs and unsafe conditions. - read more
The Benefits of Pre-Approved Boat Financing
The Benefits of Pre-Approved Boat Financing
Pre-approved boat financing is an initial green light from a lender indicating that you are eligible to borrow up to a certain amount of money for the purchase of a boat. This process involves a preliminary assessment of your creditworthiness, usually before you start shopping for your new vessel. - read more
Maintenance Checklist: Keeping Your New Boat in Top Shape
Maintenance Checklist: Keeping Your New Boat in Top Shape
Welcome to the exciting world of boating! Owning a boat opens up a realm of adventures on the water, from leisurely cruises to thrilling water sports. - read more
Common Mistakes When Applying for a Boat Loan in Australia
Common Mistakes When Applying for a Boat Loan in Australia
Imagine this: it's a perfect sunny day on the Gold Coast, the wind is gentle, and the ocean is calling. You're dreaming of steering your very own boat into the horizon. But before you can embark on your nautical adventure, you need to navigate through the often choppy waters of boat loan applications. - read more
Sea-Worthy Solutions: How to Compare Boat Insurance Providers in Australia
Sea-Worthy Solutions: How to Compare Boat Insurance Providers in Australia
Embarking on the journey to purchase a boat is an exhilarating milestone, bringing with it the promise of sun-soaked adventures and serene escapes on the water. Yet, beneath the waves of excitement, lies the crucial decision of selecting the right boat insurance provider in Australia—an aspect as pivotal as the vessel itself. Boat insurance not only safeguards your maritime investment against unforeseen incidents but also ensures that your nautical dreams stay afloat in turbulent times. - read more

Finance News

Explore the 2026 Sanctuary Cove International Boat Show's Stellar Exhibitor Line-Up
Explore the 2026 Sanctuary Cove International Boat Show's Stellar Exhibitor Line-Up
17 Apr 2026: Paige Estritori
The Sanctuary Cove International Boat Show (SCIBS) is set to make a grand return to the Gold Coast from May 21 to 24, 2026. As the Southern Hemisphere's largest marine event, SCIBS 2026 promises an unparalleled showcase of marine excellence, drawing over 45,000 boating enthusiasts, industry leaders, and luxury lifestyle seekers. - read more
BIA Calls for Balanced Approach to Sand Flathead Fishing Closures in Tasmania
BIA Calls for Balanced Approach to Sand Flathead Fishing Closures in Tasmania
01 Apr 2026: Paige Estritori
The Boating Industry Association (BIA) has recently addressed the Tasmanian Government regarding the proposed closure of sand flathead recreational fishing zones in south-eastern Tasmania, set to commence on 1 March 2026. This initiative aims to protect declining sand flathead populations; however, the BIA emphasises the necessity of a balanced approach that considers both environmental sustainability and the socio-economic well-being of local communities. - read more
BIA Endorses Dolans Bay Marina's Infrastructure Enhancement
BIA Endorses Dolans Bay Marina's Infrastructure Enhancement
01 Apr 2026: Paige Estritori
The Boating Industry Association (BIA) has expressed its support for the proposed infrastructure upgrades at Dolans Bay Marina, recognising the project's potential to significantly improve boating access and safety for individuals of all ages and abilities. This endorsement aligns with the BIA's commitment to promoting safe, responsible, and enjoyable boating experiences across Australia. - read more
BIA Calls for Urgent Improvements to River Murray Boating Infrastructure
BIA Calls for Urgent Improvements to River Murray Boating Infrastructure
01 Apr 2026: Paige Estritori
The Boating Industry Association (BIA) has raised concerns regarding the deteriorating state of essential boating infrastructure along the River Murray, emphasising the need for immediate action to ensure the safety and accessibility of these facilities for the boating community. - read more
Club Marine Introduces Specialized Insurance for Race Boats
Club Marine Introduces Specialized Insurance for Race Boats
24 Mar 2026: Paige Estritori
Club Marine, Australia's leading boat insurance provider, has unveiled a new insurance policy tailored specifically for race boats during storage and transit. This initiative aims to support participants in the Australian Offshore Superboat Championship by offering coverage for accidental loss, damage, theft, or malicious damage while the boats are on land and on their trailers. - read more
Marinas26 Conference to Explore AI's Transformative Role in Marina Operations
Marinas26 Conference to Explore AI's Transformative Role in Marina Operations
24 Mar 2026: Paige Estritori
The Marina Industries Association (MIA) has unveiled the comprehensive program for Marinas26, its biennial conference and trade exhibition, scheduled for 24–27 May 2026 at the RACV Royal Pines Resort on Queensland’s Gold Coast. Embracing the 'Future Smart' theme, the event aims to delve into emerging trends and technologies poised to reshape the marina and boatyard sector across the Asia-Pacific region. - read more

Start Here

START HERE.

Loan Amount:
Postcode:

All quotes are provided obligation-free by a participating broker from our national referral partner network. We respect your Privacy.


Quotes are offered free & without obligation. We respect your privacy.

Knowledgebase
Bond:
A fixed-income investment in which an investor loans money to an entity that borrows the funds for a defined period at a variable or fixed interest rate.


Quick Links: | Boat Loan Finance | Boat Financing Options | Marine Finance | Boat Loan Rates | Boat Loan Calculator | Boat Loan Comparison | Boat Loan Lenders | Boat Loan Terms | Boat Loan Approval | Boat Loan Application | Boat Loan Interest Rates