Balance transfer rules

By   |   Verified by David Boyd   |   Updated 29 Sep 2023

Balance transfer credit cards in Australia

There a number of guiding principles with which balance transfers between banks operate. These are relevant to existing and new customers alike.

If you haven't done a balance transfer before, or even if you have done a credit card balance transfer in the past, take a minute to familiarise yourself with the basics.

Check what balance transfer credit card offers are currently available before applying.

Key takeaways

  • The best interest-free balance transfer offers are typically reserved for new customers. Don't rely on what your bank offers. It's worth shopping around.
  • Banks restrict some types of balance transfers, like those between accounts at the same bank, from personal loans, and from Buy Now Pay Later (BNPL) accounts.
  • If your existing account is in bad standing, it's unlikely the balance transfer request will be processed.
  • Balance transfers do not earn reward points, but there are balance transfer cards that earn points on new spend.

Loyalty won't get you a better rate

Introductory balance transfer rates are for new customers

Unfortunately, the best interest-free balance transfer offers — those advertised by banks on their website, on this site, and on other comparison websites — are reserved for new customers only.

Whether or not this is fair to loyal customers is debatable, but the economic reality is that banks need new customers and balance transfers are an effective way of getting them.

Don't want a new bank?

You can't transfer debt between accounts at the same bank

If you have two credit cards with the same bank, you will probably be unable to balance transfer between them at the introductory balance transfer rate. This applies for new and existing customers and is universally the case across the entire Australian banking landscape.

Some banks have balance transfer offers for existing customers, although these offers are considerably less generous than those for new customers.

Got a personal loan?

Most banks won't balance transfer a personal loan

While there are a handful of exceptions to the rule, the majority of banks do not accept balance transfers from personal loans.

Regret splurging on Afterpay?

Very few banks can balance transfer BNPL debt

As is the case with balance transferring personal loans, very few banks will accept a balance transfer request for a BNPL account with Afterpay, Zip, etc.

Got debt overseas?

Banks do not process international balance transfers

You will not be able to do a balance transfer from an overseas credit card to a bank in Australia.

If you have moved to Australia and have a balance on a credit card in your name at an overseas bank, you could send funds from your Australian credit card to an overseas bank account and pay off your card. However, this would incur fees that you can learn about in this guide.

Balance transfer limits apply

How much you can transfer depends on your available credit

As an existing customer, you'll know what your credit limit is. (If you don't know what it is, you can find it by logging into your mobile or online banking, looking at your latest statement, or asking customer service.)

Firstly, it is not possible to balance transfer more than your available credit, i.e. your credit line minus outstanding balance.

Additionally, many banks apply a limit on how much you can balance transfer to a card. This limitation, known as the balance transfer limit, is usually a percentage of your credit limit. 80% - 90% is common. If you want more details on how much can be balance transferred, I've written about this in more detail here.

Messed up your account?

Banks won't process a balance transfer if the account is in bad standing

If you're behind on your repayments or have defaulted on a payment for the account you want to transfer from, the bank you are transferring to will not process that request. Make sure you are up to date with your payments before requesting a balance transfer.

Think you can get a free flight?

Balance transfers don't earn points

You're out of luck if you think you can get points on a balance transfer to a rewards card. There is not — and never has been — a single reward point earned on a balance transfer in Australia.

There are, however, balance transfer credit cards that earn Qantas Points and Velocity Points on new spend.

Personal and business finances are separate

You can't transfer debt between personal and business cards

It isn't possible to transfer debt either way between personal and business credit cards.

That means you won't be able to transfer debt from a personal credit card to a business credit card, or from a business credit card to a personal credit card.

This rule applies even if you have used a personal credit card for business expenses. Businesses can apply for a business balance transfer card, available from a few banks, most notably Westpac.

What about your old card?

Closing your old card is up to you

What you do with an old credit card after transferring its balance is up to you. It will remain open until you close it down.

You might want to keep it open because of its rewards benefits and to help your credit utilisation ratio. If there is an annual fee, you need to decide whether that's worth paying. Closing an old line of credit may have a temporary impact on your credit score.

If you do choose to close it, the account must be in good standing with no outstanding balance.