A balance transfer allows you to move your existing credit card debt from one card to another — usually at a much lower interest rate for a promotional period. Used correctly, it’s one of the most effective ways to reduce credit card interest while paying down debt.
1. The promotional rate (0–2.99%) only applies to the transferred balance — new purchases are charged at the standard rate (19.95%+)
2. You must pay off the transferred balance before the promotional period ends or the revert rate kicks in
3. The transfer fee (usually 1–2% of the balance) eats into your savings — factor it in
4. Don't use the old card again after transferring
How Balance Transfers Work in NZ
- Apply for a new card that offers a balance transfer deal (or accept an offer from your existing bank)
- Request the transfer: Provide the card number and balance from your old card
- Promotional rate applies: For the stated period (e.g., 6 or 12 months), the transferred balance attracts 0–2.99% rather than the standard rate
- New purchases: If you use the new card for spending, those purchases attract the standard rate (typically 19.95%+)
- After the promo period: Any remaining transferred balance reverts to the standard rate
Current Balance Transfer Deals in NZ
Balance transfer promotional offers change frequently — the best current deals should be checked directly with NZ banks. As at June 2026, typical offers include:
| Bank | Promotional rate | Promotional period | Transfer fee |
|---|---|---|---|
| ANZ | 0–2.99% | 6–12 months | ~1–2% |
| ASB | 0–2.99% | 6–12 months | ~1–2% |
| BNZ | 0–2.99% | 6–12 months | ~1–2% |
| Westpac | 0–2.99% | 6–12 months | ~1–2% |
| Kiwibank | Promotional offers available | 6–12 months | ~1–2% |
Check directly with each bank for current promotional offers — these change quarterly.
How Much Can a Balance Transfer Save?
Example: $5,000 balance at 21% currently
Without balance transfer (paying $300/month):
- Time to repay: ~20 months
- Total interest: ~$920
With balance transfer to 0% for 12 months (paying $300/month):
- Transfer fee (~1.5%): $75
- Interest during 12-month promo: $0 (transferred balance)
- Remaining balance after 12 months: ~$1,400
- Then at revert rate (if not repaid): additional interest
Saving vs continuing at 21%: Up to $800+ on a $5,000 balance over 12 months.
The Balance Transfer Trap to Avoid
The most common mistake with balance transfers:
- Transfer $4,000 of debt at 0% for 12 months
- Start using the new card for spending — those purchases charge 21%
- Minimum payments go to the transferred balance first, not the new purchases
- End of promo period: remaining transfer balance reverts to 21%, plus high-rate new purchases
Result: Worse position than before.
How to avoid it: Don’t use the new balance transfer card for any new purchases. Keep your existing low-use card for spending (or use a debit card).
When to Use a Balance Transfer
- You have existing credit card debt at 19–25% p.a.
- You can realistically repay the transferred amount within the promotional period
- You commit to not accumulating new credit card debt
Balance transfers are not a long-term solution — they buy you time at a lower rate. The underlying spending behaviour must change or you’ll be in the same position in 12 months.