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Comparing credit cards | Protection and rights offered with credit cards

What is a balance transfer card? Balance transfers explained

Find out how using a balance transfer credit card can help you control your debt and save on interest repayments

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Find a balance transfer credit card and stop paying expensive interest payments on your balance.

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In this guide:

Balance transfer cards – what are they?
Why get a balance transfer credit card?
How do balance transfers work?
Balance transfer fees
What’s the difference between balance transfers and money transfers?
How should I use a balance transfer credit card?
What to watch out for with a balance transfer card
Checklist for transferring a balance
Compare balance transfer cards

Balance transfer credit cards — what are they?

Balance transfer cards are credit cards with a low introductory rate of interest – often 0% that allow you to move your debt from an existing credit card, usually for a small percentage fee.

Transferring the balance can help reduce the amount of interest you pay and allow you to pay off your debt sooner.

Why get a balance transfer credit card?

A balance transfer card can help you better manage your finances if you are currently paying interest on an existing credit card debt.

With a balance transfer card you can shift this debt to a new card and enjoy a period of low or even 0% interest. That means that any repayments you make during the introductory period will go towards clearing the debt rather than paying interest, so you should be able to pay off the balance on your card more quickly.

If you use a balance transfer card correctly, you could save money overall by paying less interest on your existing credit card debt until it’s paid off.

To see how much your current credit card debt is costing you, how long it will take to pay off, and how much a balance transfer card could save you, try our credit card repayment calculator:

How do balance transfers work?

Balance transfers work by essentially paying off the debt on your existing credit card and transferring it onto the new card.

Balance transfer credit cards usually offer a 0% interest rate for a number of months. These introductory periods can last anywhere between three and 36 months, allowing more time to pay back the debt without incurring interest.

After the introductory period ends, the interest will revert to its standard rate — so if you haven’t repaid your debt you may be stung by a significantly higher charge. It is worth noting that interest rate which the credit card reverts to, is typically higher than on other credit cards too.

Balance transfer fees

Most credit card providers charge a balance transfer fee of between 1% and 4% of the amount you’re transferring. Any fees should be made clear upfront when you’re comparing cards and in most cases will be added to your overall balance that you need to repay.

While a transfer fee is very common, some fee-free cards are available. These effectively enable you to borrow for free if you can repay the balance before the 0% period expires. While a card without a fee may cost you less overall, no-fee cards can sometimes have shorter introductory periods.

Before choosing whether to take out a standard or no-fee balance transfer card, take a look at the length of the introductory periods available and consider whether might prefer to pay the small fee for the flexibility of having longer to pay off the balance.

What’s the difference between balance transfers and money transfers?

It’s important to note that balance transfers are not the same as money transfers, although both features can be included on the same credit card.

Money transfer credit cards work in a similar way to balance transfer cards but instead of paying off your credit card debt, the money gets paid into your bank account.

This means you can use a money transfer credit card to pay off an overdraft at 0%. The interest periods on money transfers are similar in length to balance transfer credit cards, ranging somewhere between six months and three years.

The fees for a money transfer are usually higher than balance transfers, costing between 3-4% of the amount you are transferring.

How should I use a balance transfer credit card?

There are two options when using a balance transfer credit card:

  1. Continue paying off your credit card debt at the same rate as before — it will clear faster and cost you less as you won’t be accruing interest charges
  2. Repay your debt at a lower cost than before — it may take longer depending on how much less you decide to pay each month but it could give you your wallet a break, freeing up funds to pay for more of your everyday expenses

Enter your details into our debt repayment calculator below to see how much your current debt is costing you, how long it will take to pay off, and how much a balance transfer card could save you:

What to watch out for with a balance transfer card

  • Don’t miss any repayments: Your credit card provider can revoke the introductory offer if you miss a payment, so make sure you pay your new credit card bill each month. Set up a direct debit if you can, to help ensure you don’t miss a repayment.
  • Don’t make purchases on your card: Unless you’ve got a balance transfer card that also comes with a 0% interest purchase period, you’ll end up paying interest on anything you buy on the card.
  • Check your eligibility and credit rating: Not everyone who applies for a balance transfer credit card will be accepted. Use the uSwitch credit card eligibility checker to see if your application is likely to be successful — it’s a soft credit check and doesn’t leave a mark on your credit report.
  • Consider balance transfer fees: Factor in the cost of the fees on top of the balance you need to repay. In most cases, paying 0% interest on a large debt will cost you less, even if you are charged a balance transfer fee, but it helps to figure out the biggest savings in advance so you can pick the right credit card for you.
  • Be prepared to switch: Nearly all balance transfer credit cards will not let you transfer a balance from the same provider – make sure you’re looking at credit card providers you’re not planning to transfer a balance from.
  • Get your timing right: To make the most of the introductory period, you need to transfer and clear your balance before it ends. Set up a Direct Debit to take the same amount every month from your bank account to repay the debt – make sure it can clear the entire balance within the 0% interest period.

Checklist for transferring a balance

    1. Use our calculator to see how much you could end up paying on your current credit card plan.
    2. Use our credit card eligibility checker to estimate the likelihood of being accepted for a balance transfer credit card.
    3. Enter the balance you want to transfer and compare available balance transfer cards.
    4. Check how much you would need to pay each month to repay the balance within the 0% interest period.
    5. Once you’ve picked the balance transfer credit card you want, click to apply.
    6. When you’re ready to make the transfer, your new credit card provider will ask details of the credit card you want to transfer the balance from – the transfer usually takes 1-2 business days. You typically have a limited time to complete the transfer or you could lose the opportunity to benefit from the introductory offer.
    7. Start repaying your balance within the 0% interest period.
    8. If you won’t be using the old credit card you just transferred the balance from, you may wish to close the account to reduce the amount of credit you have available — this could help improve your chances of applying for other forms of credit, such as a mortgage or a loan, in the future.

    Ready to get started? Compare balance transfer credit cards with uSwitch now:

    Compare balance transfer credit cards

    Find a balance transfer credit card and stop paying expensive interest payments on your balance.

    Compare credit cards

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