If you have a credit card then shopping around the market for another can actually save you money.
Balance transfer credit cards will allow customers to transfer the debt from their existing credit card to the new credit card provider.
These cards often come with special introductory offers to give you time to pay off the debt at a better rate.
You can look at the best balance transfer credit cards on the market and continue reading our guide to see if you can save money.
What are balance transfer credit cards?
A credit card balance transfer simply means moving your debt from one credit card to another – but transferring balances is not allowed between two credit cards by the same company.
It’s often a good way to save money, as many credit card companies use balance transfer credit cards to entice new customers with an interest free period on the balance transferred.
Five top tips for credit card balance transfers
Playing the balance transfer game could save you a fortune in credit card interest rate payments, provided you stick to a few basic rules – read on for our five top tips for successful credit card balance transfers.
1. Know how long the offer lasts.When you transfer your credit card balance to a new card, always make a note of when the introductory 0% balance transfer rate ends. When the period is up, the credit card will revert to a more expensive standard rate.
If you haven’t paid off your balance by the time the 0% period is up, it might be a good idea to switch to another 0% balance transfer deal.
Start looking for your new card about six weeks before your deal is due to end to allow plenty of time to arrange your next balance transfer.
2. Double check the rate.The rate you see advertised isn’t necessarily the rate you will get.
Credit card providers only have to give the typical APR they advertise to 66% of successful applicants – for example if you have had credit problems in the past you may be given a higher APR.
Check that the rate you see advertised is the rate you will actually get, to avoid a shock when your first statement arrives.
3. Find out what the introductory rate covers.The introductory 0% rate on balance transfers does not necessarily apply to other kinds of credit card spending – you will often find that the rate on purchases or cash withdrawals is much higher.
Make sure you know the rate you will be paying on your other credit card spending, not just balance transfers.
4. Check the balance transfer fee.Most credit card providers charge a balance transfer fee when you move your balance from one credit card to another.
The fee is typically around 3% of the balance you wish to transfer, but this varies between providers, and there are some fee-free options available.
Think about whether paying a balance transfer fee will outweigh the benefits of a 0% introductory deal – transferring your balance to a card with a low standard rate APR or one with no balance transfer fee could be cheaper in the long run.
5. Don’t spend on your balance transfer card.It is best never to spend on a balance transfer credit card.
Making a purchase on your balance transfer card can be expensive – purchases are usually charged at a higher rate of interest and the order of payment means you won’t be able to pay off this more expensive debt until the balance you transferred has been paid off.
If you do want to spend on your balance transfer card, look for one that offers a 0% introductory period on both purchases and balance transfers.