Is it possible to use a balance transfer card for rewards?

Published on November 20th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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People who are looking for a card that offers them the best of both worlds by being able to manage their debt while gaining points in the process can now find this in balance transfer cards that have partnered with reward programs. There are a few considerations that you need to keep in mind when using a balance transfer card for reward cards and this is what you need to know.

What is a balance transfer card?

balance transfer card is a credit card that usually comes with a 0% interest rate and can be used to consolidate debt at a low rate. This card is usually effective for people who want to better manage their debt. However, it is important to remember that Balance transfer cards come with an introductory rate that can range anywhere from 3 months up to 24 months before reverting back to the cash advance rate. Using the introductory period can be most beneficial before it reverts back to a higher interest rate.

How can you gain rewards on a balance transfer card?

There are a couple of balance transfer credit cards that have partnered up with reward programs that can help cardholders to gain points while they swipe. Most reward cards generally require that you make an eligible purchase on the card in order to start gaining points. Checking the card requirements can help you know which purchases will help to bring you to your goal of gaining points.

The pros

  • Save on debt. You can consolidate your debt at a low rate when you transfer to the card.
  • Save money and gain points. Not only will you be managing your debt more effectively but you can also gain points in the process to use later.
  • Get access to benefits. Depending on the type of card you have and the reward program, you will be able to get access to a range of benefits such as complimentary travel insurance, concierge services, and potential flight upgrades.

The Cons

  • The high-interest rate. The 0% interest rate only applies to your transferred debt which means if you use the card for purchases you will attract a high-interest rate.
  • Could increase debt. Being a point chaser when you already have debt that needs to be taken care of may not be ideal.
  • The value of reward points. You will need to spend money to earn reward points that may not even have a strong point rate. Keep in mind that this card comes with an annual fee that you need to consider before using the card.

You may be disappointed if you were hoping to gain points by using your balance transfer card to pay for your debt as there are no credit cards in Australia that offer rewards on balance transfer debt. If you compare whether it will be worth to use a balance transfer for reward points you will soon find that it comes with a high price that isn’t worth it as it could affect your repayments on the card.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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