The Australian finance industry has been flooded with credit card balance-transfer products. 17 new offers have been released onto the market so far this year; with more likely to appear.

On the one hand this is good news for cardholders who are suffering debt-stress after the post-Christmas sales.

On the other hand it is bad news for cardholders who ARE suffering debt-stress after the post-Christmas sales.

The Reserve Bank of Australia has said credit card debt ballooned to a staggering $50.5 billion in November 2014. And while the interest rate on cash is at its lowest rate in years (steady at 2.5 per cent), the interest rates on credit cards hasn’t dropped at all (in some instances in excess of 20 per cent).

But card balance-transfer deals are set to shake things up.

Citibank is leading the way with an interest-free balance-transfer deal of 24 months. It has also wiped out its three per cent balance-transfer fee for new customers.

Michelle Hutichison, from finder.com.au, says balance-transfer deals are a lifeline for many cardholders who find themselves in trouble.

“We have seen a 20 per cent increase in people shopping for balance-transfer credit cards every January for the past four years,

“After people spent up big at Christmas many cardholder get their bill in January and look to get rid of their debt with interest-free balance-transfer deals.”

But people still need to be careful with this new product. Discipline is still required. With many deals new purchases attract headline interest rates.

However, for those willing to pay off their principal debt before adding to it balance-transfer deals can provide a way out.

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