Balance Transfer: how it works
Checked 15 Oct 2026. Uses the same approach as Moneysmart's credit card calculator, so you can cross-check a result there.
Enter your card balance, its interest rate and what you can repay each month, then the offer's transfer fee, intro rate and period, and the revert rate. The calculator compares two plans with the same monthly repayment: staying on your current card, or transferring the balance.
The transfer fee is a percentage of the balance, added to the new card on day one. The intro rate then applies for the intro period, and the revert rate after that. As in Moneysmart's credit card calculator, interest is charged monthly at the yearly rate ÷ 12, and it assumes no new purchases, cash advances or annual fees.
It also shows how much will be left when the intro period ends, and the monthly repayment needed to clear the balance (fee included) before the rate goes up.
General information only, not financial, tax or credit advice. Check your situation with the ATO, your state revenue office or a licensed adviser.
Balance Transfer FAQs
Is a balance transfer worth it?
Usually, if you avoid new spending and keep repaying. Moving $5,000 from a 20% card to 0% for 12 months with a 2% fee, paying $300 a month, costs $183.94 in fees and interest instead of $906.81: a $722.87 saving. The card is cleared in 18 months instead of 20.
What happens when the intro period ends?
Whatever's left starts attracting the revert rate. In the example above, $1,500 is still owing after 12 months, and at 21% that adds $83.94 of interest before it's cleared. Paying $425 a month would clear the whole $5,100 (fee included) within the 12 months.
How much should I pay to clear it before the 0% ends?
The balance plus the fee, divided by the months in the offer. For $10,000 with a 3% fee and 24 months at 0%, that's $429.17 a month. Paying $450 a month clears it in 23 months for just the $300 fee, against $2,594.68 of interest if you stay on a 20% card.
What if I only make small repayments?
The transfer still helps, but less. Paying $150 a month on $5,000, the transfer costs $1,003.24 in fees and interest, with $3,300 still owing when the 12 months at 0% end. Staying on 20% costs $2,359.09 and takes 50 months, against 41.
Do new purchases get the 0% rate?
Usually not. On many balance transfer cards new purchases are charged interest straight away, and repayments may go to the 0% balance first. Avoid spending on the card and read its key fact sheet before you apply.