Credit card balance transfers

A credit card balance transfer simply means moving your debt from one card to another. It's often a good way to save money, as many credit card companies offer an interest free period on balance transfers to new customers. You can consolidate your debts by transferring the balance from more than one card or you might be able to find a new credit card with a lower interest rate.  Switching to a 0% balance transfer card could save you up to £328 over 16 months.

Some credit card companies now charge a transfer fee so be aware of this too. We will, however, take this into account when we calculate your results.

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 uSwitch's 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, like the Halifax All In One  - you get 0% for the first 9 months on balance transfers made in the first 90 days (3% handling fee applies), 0% for the first 9 months on purchases and 15.9% APR typical variable.  Find out more about the Halifax All In One.

If you want a credit card with a good balance transfer deal, use the free and impartial uSwitch.com credit card comparison service and it will automatically display this information alongside the cards that are best for your circumstances. Start your comparison now to find your best balance transfer options.

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