When the Reserve Bank adjusts official interest rates, the focus is almost always on mortgage rates.  What seems to slip under the radar is the interest rates that banks and other credit providers are applying to credit cards.  The current average annual interest rate is around 16.6%, but some cards are as high as 29.9%, and at the other end of the market, there are cards available at around 10%.  For the people who pay the balance off each month and get to use the bank’s money for free, interest is not an issue.  However, if you’re carrying a credit card debt which you’re unable to pay off at the end of the month, you may want to consider a balance transfer.

Unlike mortgages and other loan products which can take weeks to transfer, a credit card balance transfer to another provider can usually be done within twenty-four hours.  You can use websites such as www.ratecity.com.au to compare interest rates and other charges to find the card that’s best for you.  Before you apply for the transfer, it’s worth asking yourself why you’re doing it.  If your intent is to get rid of your credit card debt entirely, make a commitment not to use the new card and to pay down as much of the outstanding balance as you can while the interest rate is at its lowest.  You might also want to check that your original account has been closed and cancelled.  If you want to keep using your credit card, be aware that the new provider may give you a higher credit limit, which could ultimately see you in more debt, and when the “honeymoon period” for the low interest rate ends, you could be in a worse position than when you started.  Getting rid of credit card debt can be hard work, but very fulfilling when you’ve done it.