Bank of Melbourne Vertigo Credit Card 0% Balance Transfers for 20 Months ($99 Annual Fee)

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fantacular on 21/02/2016 - 14:44 bankofmelbourne.com.au (470 clicks)
Last edited 21/02/2016 - 15:04 by 1 other user

There are quite a few 0% balance transfer deals going around at present. If you have a home loan with an offset account and qualifying income, you can use these deals to benefit from the "arbitrage" created by the differing interest rates and seriously reduce the cost of interest on your mortgage. As an example, I took out a Bank of Melbourne credit card as linked above, with a limit of $32,000. I did a balance transfer for $30,000 which will attract 0% interest for 20 months. My home loan rate is about 4.3%pa. Over 20 months, this will save me around $1,500 in interest and help me to pay off the loan faster. It's basically free money and definitely worthwhile!

There are a few catches, but they are not really deal breakers in my opinion
* You need to make the minimum repayments on the credit card, which will reduce your savings from the theoretical maximum
* You might need to pay an annual fee - in this case $99/yr, but you can reduce that to $nil if you open a transaction account first and put $2,000 through it a month. Even if you couldn't be bothered with putting $2,000 through it you can open the account and not use it, attracting a $3/mo fee, reducing the annual fee to $36. In any case, the savings easily pay for the annual fee.
* Other credit providers may charge other fees, like a "once off BT fee" of 1.5% - these will reduce your profit.
* It may not be great for your credit rating, but provided you pay it off on time I don't see how it could be terrible either. If you need to borrow more money for another reason and don't want this showing up in your debt commitments then you could always close it off earlier than the 20 months.

My back of the envelope maths say the maximum you could save with this is $2,150 - but actually maximum would be higher than this, as by paying less interest for 20 months you will pay off more principal, reducing your ongoing interest. I'm sure there is a way to figure out exactly what this amounts to - if someone is a finance wizz please tell us!

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• 

  MJ1 on 21/02/2016 - 14:54

  +1

  The terms specify transfers are only to be from:

  "request at application to transfer balance(s) from non- St.George, Bank of Melbourne and BankSA Australian issued credit, charge or store cards."

  How did you get your mortgage transfer approved?

  • 

    furythree on 21/02/2016 - 15:02

    -1

    with lies

    • 

      CyberMurning on 21/02/2016 - 15:04

      +1

      White lies or black lies?
      Explain please.
      As far as I know, only possible with Citibank balance transfer cheque to self

      • 

        fantacular on 21/02/2016 - 15:40

        good point - I was not aware of the cheque to self feature is only available on citibank. I didn't have to do a cheque to self, as in my case I actually rolled this BT off a citibank ready credit account I had which I setup to do the same thing. The citibank acct was at an interest rate of 1.9%pa (and when I started that my mortage rate was 5.2%), and this was even better.

        This creates a little inconvience but doesn't get in the way of making it happen. You could either setup like a citibank acct like I did and do a cheque to self, then roll it to Bank of Melb - or you could apply for Bank of Melb and once approved then run up a bunch of cash advances on your current credit card and then BT it. A few hours or so of fscking around, but with around $1,500 worth of savings I figured it was worth my time.

      • 

        smoke87 on 21/02/2016 - 16:51

        @dannnnn:

        +1 Citibank cheque to self, did it too

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  kzl on 21/02/2016 - 16:38

  +1

  I love how we get so many of these credit card deals that I can just tell what "CC" and "BT" stands for

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  alo1234 on 21/02/2016 - 16:48

  Would you please tell me how you managed to put $30k balance on your $32k limit?

  • 

    Steptoe on 21/02/2016 - 17:13

    Promotional rate will apply to any balance(s) transferred (min $200 up to 95% of your approved available credit limit) for 20 months, unless the amount is paid off earlier.

    • 

      alo1234 on 21/02/2016 - 17:20

      So that mean I can pretty much get 95% of my credit limit regardless of the money I actually spent on the card itself? If so it would be great :)

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  stemon on 21/02/2016 - 17:18

  +1

  No lies, no cheating. This is how I do it. Start with credit card # 1 (card#1) which has a zero balance. Open a BoM credit card with BT to card#1 for $30K. BoM ask no questions. There's no rule (AFAIK) that says card#1 has to have a debit balance. So, card#1 now has a $30K credit balance. Take that balance as a cash advance and put it on your mortgage or if debt free, put into an ING or Rabo high interest savings account. There's no cash advance fee if you take a credit balance - other than a nominal ~$2.50 transaction fee that banks are usually happy to credit back to your account. Citi will let you BT 80% of your credit limit; BoM will let you transfer 95% of your credit limit (I think); St George will let you BT 95% of your credit limit (I know). If you're disciplined, it's easy pocket money.

  • 

    neil on 21/02/2016 - 18:20

    Take that balance as a cash advance

    How does that work? Surely not going to the ATM 60 times at $500 a withdrawal?

    • 

      stemon on 21/02/2016 - 18:58

      LOL

      Just jump onto internet banking and transfer $30K from your credit card (card#1) to your bank account. You might have to call the bank for card#1 to get a release if over your daily cash advance limit, but pretty effortless.

      • 

        Spending2Much on 21/02/2016 - 19:22

        What's the minimum repayments on the c.c. for the 30k?

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  stemon on 21/02/2016 - 19:31

  Depends on the provider. HSBC is 3%, Citi and BoM, I think 2%, so at least $600 per month - decreasing a bit each month as BoM balance decreases. The thing to remember is that the original capital needs to be sitting in an offset account or savings account so that when the interest free period is up, that you have the money readily available to pay off the balance.

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  sasangeleus on 21/02/2016 - 20:06

  Gets all the way to the end.. application error. Close page is only option..

  +1 to op for what is a good BT deal.

  Would +2 if I didn't get an error and could actually complete app lol

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  JuryWheel on 21/02/2016 - 21:33

  30k limit is huge straight off the bat! Did they ask for any income proof? Any chance of exaggerating income to get a larger limit..?

  • 

    fantacular on 22/02/2016 - 11:38

    yes of course they asked for proof, but i expect this is fairly normal. i provided my last 3 payslips via email. not sure how you'd go with exaggerating, i didn't do it.

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  olivergiam on 21/02/2016 - 23:55

  What's the best way to withdraw the money and put into the loan account? Do they actually charge withdrawal fee if you have credit in your account?

  • 

    fantacular on 22/02/2016 - 11:40

    it needs to be a balance transfer mate - so you already need to have the money withdrawn on another account such as citibank where you can do cheque to self, or any other credit card where you do a cash advance via netbank. you then transfer the debt balance from one account to the bank of melbourne one. read the comments above.

    • 

      zapartos on 02/03/2016 - 16:45

      Hi Dann,

      Thanks for posting. I love the way you think! I'm wanting to do it too, I've got a citibank ready credit account, but when I went into the branch, the people told me that it had to be a BT from another credit card and not from a loan account.

      How did you get around this?

      Thanks :)

• 

  fantacular on 03/03/2016 - 08:09

  They had no problem paying off my ready credit account, I just sent them the payment details and they did an electronic transfer.

  • 

    zapartos on 04/03/2016 - 07:23

    Thanks for the reply dan,
    Did you do it in the branch or online yourself?

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  zapartos on 04/03/2016 - 07:23

  Thanks for the reply dan,
  Did you do it in the branch or online yourself?

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  fantacular on 05/03/2016 - 11:01

  Online

  • 

    zapartos on 06/03/2016 - 10:42

    Thanks Dan,
    I'm going to give it a try today! Thanks for the inspiration, you're awesome!

  • 

    zapartos on 07/03/2016 - 22:17

    Hi Dan,

    I tried it last night and it didn't give me the choice to do the BT under personal loans (Citibank readycredit) only for credit cards.
    How did you get around this?

    Thanks

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  fantacular on 08/03/2016 - 21:20

  I entered my Citibank account number and when they phoned me up to check the details I have them the bsb and account number

  • 

    neil on 08/03/2016 - 21:35

    BSB? Do potentially you could use a bank account or offset?

    • 

      fantacular on 09/03/2016 - 10:03

      Potentially, I didn't try so I can't say

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  fantacular on 08/03/2016 - 21:21

  Citibank will have issued you with a visa debit card, enter that number if you can. I had mine locked away and cbf-ed getting it out of the safe for the form.

  • 

    zapartos on 10/03/2016 - 21:14

    Thanks for the tip Dan, I'll give it a go

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  ukulele on 15/03/2016 - 15:43

  I had a quick look but do you have the link which says they will waive the 99 fee if you open a transaction account?

  I have 13k in a balance transfer which expires soonish, it's just sitting in my offset account and want to keep it going for a while.

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  excite on 21/03/2016 - 11:18

  Thanks for the information, just according to webpage "Existing Bank Of Melbourne customers can also enjoy a $0 annual fee for the first year^ when you apply via this page by clicking on the Bank Of Melbourne customers 'Apply now’ button and make your first purchase within 3 months from card approval."
  looks like existing customers have to make a purchase to avoid the annual fee for the first year, but interests would be incurred if using the card after BT, is that the case?

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  fantacular on 25/03/2016 - 11:36

  No idea, but if you're worried then buy a packet of gum on credit.