The best 26-month balance-transfer credit card deals 

Credit card customers laden with debt can exploit interest-free periods of more than two years to help quickly pay down their card balance.

Credit card customers laden with debt can maximise interest-free periods of more than two years to help quickly pay down their card balance.

Many financial institutions offer balance-transfer deals — where you transfer your card debt from an existing card to a card with little or no interest — before interest kicks after the promotional period ends.

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These cards are popular among cardholders who are swimming in debt and have struggled to pay it back.

New analysis from financial comparison website RateCity shows these lenders — Bank of Melbourne, BankSA, St George Bank, Bankwest and Citi — all offer BT deals of up to 26 months.

Compare balance transfer credit cards

RateCity chief executive officer Paul Marshall said while these deals could be a great way to crush debt they could also leave customers in a worse financial position.

“A 26-month interest-free period may sound appealing but be conscious that you’ll also likely be paying three years of annual fees,” he said.

“Be aware of the revert interest rate. Once the introductory period ends you’ll be slugged with interest charges as high as 25.99 per cent on your outstanding balance.”

Customers looking to quickly wipe credit card debt should consider balance-tranfser offers which offer interest-free periods.

If customers make purchases on a balance transfer card it’s unlikely any interest-free days apply.

Latest Reserve Bank of Australia figures highlight the nation’s serious credit card debt problem. People owe more than $50.5 billion on plastic and $31.7 billion is accruing interest.

Bank of Melbourne chief executive Michelle Winzer said many of its customers maximised interest-free BT deals to become free of credit card debt.

“Our average balance transfer is around $7,000,” she said.

“Around a third of our customers pay off the balance during the no-interest period and almost 70 per cent of customers either pay off their balance or move the balance elsewhere.”

RateCity calculations show a customer who transfers $4000 of card debt onto a 26-month interest-free BT card - with an interest rate that reverts to 19.7 per cent - would need to make at least $212 of monthly repayments to wipe the entire debt within this time frame.

Experts suggest cardholders set up automatic direct payments onto the BT card to make sure the debt is paid off whenever the customer receives income.

@sophieelsworth

Originally published as The best 26-month balance-transfer credit card deals