With a balance transfer credit card, you transfer an existing high-interest credit card balance to a new card that offers a period of 0% interest on that transferred balance. This could provide you time you need to pay down your debt without adding new interest charges.
What is a 0% balance transfer credit card?
A 0% balance transfer card is a credit card that offers a period of 0% interest on balances that you transfer from other credit cards. While there may be other fees you encounter along the way (such as a balance transfer fee), a 0% balance transfer card can be a great financial tool to consolidate your debt and get some breathing room while paying down your credit card balance.
Average credit card interest rates can be steep. That can make paying down a balance challenging. That’s because even as you make payments, added interest means the balance continues to grow.
This is what makes a 0% balance transfer credit card so desirable. It gives you an extended period — sometimes multiple years — to pay down your existing balance without incurring fresh interest charges.
When a balance transfer isn’t 0%
When people talk about a ‘balance transfer credit card’, it’s usually synonymous with a 0% balance transfer credit card. But a balance transfer does not have to include a 0% period.
Many credit cards allow balance transfers without offering a promotional interest-free period. It’s a very similar thing: you transfer a balance from one credit card to another. But the important difference is that once the balance is transferred, you incur interest at the standard rate for the new card.
This obviously is a much worse deal than a 0% balance transfer. So when considering a balance transfer, be aware of whether the balance transfer comes with a 0% promotional period or not (note that all of the balance transfer cards listed on this page do include a 0% promotional period).
How do balance transfer cards work?
The balance transfer process is fairly simple. In effect, your new card company pays your old card company.
For example, let’s say you transfer a balance of £5,000 from one credit card with an 18% APR to a credit card that offers 0% on balancer transfers. In this case, the balance on your first credit card account will decrease by £5,000 while your balance on your new card will increase by £5,000 (plus any applicable balance transfer fees).
Once the transfer is done, you will now have to pay back the balance to the issuer of your new card. Only now, you will have time to pay it down without incurring new interest charges.
How much money does that save you over time? The table below shows how much you would save in interest by paying off a £5,000 balance during a 0% introductory period compared with paying off the same balance over the same time at an 18% APR.
| Length of introductory 0% period | Amount saved |
| 12 months | £500.80 |
| 15 months | £620.80 |
| 18 months | £742.54 |
| 21 months | £865.93 |
The interest saved depends on the length of your 0% introductory APR on balance transfer offer, how much debt you have to repay and whether you have to pay a balance transfer fee (note that the table above assumes no balance transfer fee). However, that being said, most people will find that switching their balance over will save them hundreds in the long run compared with carrying a balance on a standard APR credit card.
It is worth noting that you usually cannot transfer balances between cards owned by the same credit card provider.
Types of balance transfer credit cards
Knowing the different types of balance transfer cards and what each card offers simplifies the decision-making process.
Balance Transfer Cards with the Longest 0% Period
A longer 0% balance transfer is ideal in most circumstances. These include cards that offer a balance transfer period of 24 months or longer.
Balance Transfer Cards with the Longest 0% Purchases Offer
A 0% purchase period can be a nice benefit to a balance transfer card as well. Keep an eye out for cards that offer the longest 0% purchase period.
No-Fee Balance Transfer Cards
0% Balance Transfer Credit Cards may come with an initial balance transfer fee. Therefore, having no balance transfer fee may be a huge bonus, although a no-fee card typically has shorter 0% interest periods and may have higher interest rates when the 0% period ends. Balance transfer fees typically range from 1.5% to 3%.
Balance Transfer Cards with High Limits
A high limit balance transfer card may be appealing for some. But it’s important to remember that the credit limit on a credit card will be determined based on the credit-worthiness of the person applying. So even if a card would offer a very high credit limit to some cardholders, that doesn’t mean that all applicants will get offered a high limit.
How long is the 0% transfer period?
The 0% transfer period varies widely between credit cards. The time before interest is added could be anywhere from six months to 31 months. Generally, the cards with longer 0% transfer periods are only available to people with very high credit scores.
What happens when the 0% interest-free period ends?
When the 0% interest-free period ends on your credit card, you’ll be charged a new interest rate (this will have been in your original credit card agreement) and you will owe interest on any unpaid balance. Therefore, it can be a good idea to choose a card that offers you a long enough interest-free period that you can realistically pay off the full balance.
Do all cards have a balance transfer fee?
Most balance transfer credit cards, especially those with the longest 0% interest periods, charge a balance transfer fee. This fee is worked out as a percentage of the amount you transfer, usually between 1.5% and 3% of your credit card balance. There are some cards that don’t charge a fee, but those tend to have shorter 0% interest periods and may have higher interest rates when the 0% period ends.
What to consider when choosing a balance transfer card
There are several things to consider when choosing a balance transfer credit card. These include:
- The length of the introductory period – It might seem that the longer the balance transfer period, the better. But that’s not quite true. The longest offers on the market almost always include a balance transfer fee, so you may end up paying unnecessary fees if you go for a 0% period that’s longer than you actually need. So, the best thing to do is to consider how long you (conservatively) need to pay down your balance, and choose a card that matches that.
- Balance transfer fee – All else equal, you want lower fees. With balance transfer cards, you can often find offers with more than 10 months of 0% interest with no balance transfer fee. However, the longer the balance transfer offer is, the higher the balance transfer fee is likely to be. So be aware of this when you’re comparing cards.
- The card’s standard APR – Once the 0% promotional period runs out, you’ll start accruing interest at the APR rate that the card issuer gives to you. While it may be your goal to pay your balance in full before the end of the interest-free period, it is worth getting a card that has a low standard APR just in case you don’t keep up with your repayment plan.
- The 0% purchase period – Many 0% balance transfer cards also offer a 0% purchases period. This can be nice to have, because it means that while you’re paying down the balance you’ve transferred, you can also avoid building interest on new purchases. But there’s a catch here. The balance transfer period and the 0% purchases period aren’t always the same, and keeping track of when each period runs out can get confusing if you’re not careful. And that can make avoiding incurring interest more challenging.
- Other fees – As mentioned above, most balance transfer cards don’t carry an annual fee. So, a balance transfer card with an annual fee better be truly top notch to be worth it. It’s unusual for a balance transfer card to not have a non-sterling transaction fee. So, if you do a lot of travelling abroad, consider a travel-focused credit card that doesn’t have that fee.
- Rewards and other perks – When you’re comparing balance transfer cards, keep the most important thing in focus — finding a card that provides a 0% period that’s long enough for you to pay down your balance and, ideally, doesn’t hit you with a balance transfer fee. But if you’re choosing between multiple cards that have similar 0% periods and similar balance transfer fees, why not choose the one that rewards you for your spending as well?
Pros of 0% balance transfer cards
There are two main advantages of a 0% balance transfer credit card. These are:
- Repay debt faster. If you have an outstanding debt on one or more credit cards, transferring the balance to a low or 0% interest balance transfer card could save you a lot of money in interest repayments – this means you can pay off your debt more quickly.
- Debt consolidation. Depending on your total debts, a balance transfer card will enable you to combine balances from other credit cards onto one card. You’ll only need to make one monthly repayment, making it easier to manage your finances.
Cons of 0% balance transfer cards
If you’re carrying a credit card balance and paying high rates of interest, a 0% balance transfer card can be a great tool to help you deal with that debt. But there are a few things that you need to keep in mind when using balance transfer cards.
- Transfer fees: Many balance transfer cards carry some sort of balance transfer fee. The fee is typically around 1% to 3% of the balance you are transferring. If your balance is £5,000, for example, you would have to pay £150 in fees with a balance transfer card that charges a transfer fee of 3%.
- The 0% interest period ends: Another thing to be conscious of with a balance transfer period is how long your introductory 0% promotional period is. One of the largest risks of taking a card out like this is that you still have a balance left on the card when the interest-free introductory period ends. When the 0% period ends, the card reverts to its standard APR. It is wise to ensure you pay the balance off in full before the end of the introductory period. Otherwise, when the promotional period ends, you’ll start racking up interest at the card’s regular rate.
- Monthly minimum payments: In order to keep your interest-free introductory rate, most cards require you to make your minimum monthly payments. If you miss any payments — and with some cards this only has to happen once — you could lose your 0% APR offer. When that happens, interest on balances will be charged at the standard APR.
- Could impact your credit score: Finally, any sort of balance that sits on a credit card, whether or not it is under a 0% interest term, could count against you in terms of your credit score. If you apply for a mortgage or a loan, the lender will most likely conduct a credit check, which will look at any existing credit card accounts and the level of debt you owe. While the balance may no longer be incurring interest charges, it is still a balance that you will need to repay and a factor the lender will consider when deciding whether to loan you money.
Does a balance transfer affect your credit score?
Although a balance transfer can be helpful in managing debt, yes, it can also affect your credit score.
Here are some things to consider:
- Try not to make multiple card applications: Applying for a lot of credit cards within a short time frame can damage your credit score. It’s best to research a range of cards before hand and then just apply for the one that works best for you and that you are likely to be approved for.
- Lenders prefer long-term accounts: New credit of any type can affect your credit score because lenders prefer long-term accounts that demonstrate consistent credit use over years. Therefore, a new credit card will likely cause a dip in your credit score. The good news is that this dip should be temporary.
- Reducing debt: 0% interest cards can help you reduce your credit balance quicker. If you can clear your balance without missing payments, your credit score will improve in the long term.
Is a 0% balance transfer credit card right for you?
A balance transfer card is not the right option for everyone. It is a useful financial tool, but if used incorrectly could lead you into deeper debt.
It could be right for you if…
Give yourself a quick check against the following three statements. If you can say ‘yes’ to all three, then you may be a good candidate for a balance transfer credit card:
- You have an existing credit card debt at a high APR
- You are serious about paying your balance off in full
- You won’t overspend on your old credit card and end up with a new balance to pay down
Consider an alternative if….
Consider an alternative if you don’t plan to pay off the card within the 0% period. If you transfer a balance but don’t pay it off, while racking up another large balance on your old card at high standard APR, you could end up in a much worse financial situation.
However, if you are conscientious, do your research and make your payments, a balance transfer card can be a brilliant way to consolidate debt and get yourself out from underneath high interest charges.
What is the best balance transfer credit card?
Unfortunately, we can’t say one card is the best balance transfer card, as it will largely depend on your personal financial situation. But, we can help you determine the best steps to finding the card that fits your needs.
How to find the best balance transfer credit card for you
Here are a few steps to think about to find the best balance transfer card for you:
1. Outline your financial goals
Start with understanding your goals and how a credit card plays into them. Do you want to pay off debt? Will you need a card for new spending? That will help you choose the right one for you.
2. Compare balance transfer cards
Now that you know your goals, compare balance transfer cards with the features we’ve outlined above. Hopefully this page will give you a good idea of what some good options for you could be.
3. Use a balance transfer calculator
Once you’ve found a few potential card options, a balance transfer calculator can help you break down which card will help you save the most.
4. Check your eligibility and apply
Lastly, before you apply for a balance transfer card, you’ll want to check your eligibility.
This is especially important with balance transfer cards, as most of them typically require a higher credit score than an average card.
Once you’ve ensured you’re eligible, you can apply for the card.
Alternatives to balance transfer cards
While a balance transfer credit card can be a great way to repay debt, there are alternatives:
- Pay down your existing credit card balance. If you have more than one cards, then pay at least the minimum payment on each one every month, and use any extra money to make further payments on the debt with the highest interest rate. Once you have fully paid off that card, start repaying the next most expensive. This tactic is often known as the debt avalanche.
- Apply for a debt consolidation. This is a type of personal loan that often charges a lower APR than credit cards. You then use the loan to pay off your existing credit cards.
- Request debt relief. If you’re having serious problems in repaying your debt, you can apply for a payment plan. This involves speaking with your creditors to negotiate new terms that will help you repay your debt, such as a longer time frame to pay, or a lower interest rate.
If you’re looking for a new credit card, check out our featured rewards credit cards and start comparing today.
Learn more
- What is a balance transfer credit card?
- How do balance transfers work?
- How many credit cards should you have?
- How to pay off credit card debt
Frequently Asked Questions
-
It's when you transfer an existing debt balance from one financial institution to another, usually to take advantage of a promotional 0% or low-interest period.
-
It’s valuable to avoid paying high interest rates on debt where possible, and balance transfer credit cards allow a period of many months for cardholders to pay off what they can without getting further in the red due to interest racking up.
-
This varies by bank and can range from one working day to multiple weeks. When you are approved for a 0% balance transfer, your new bank should be able to provide information on how long it will take to process your transfer.
-
This is a fee that you often have to pay when making a balance transfer. A balance transfer fee typically ranges from 1% to 3%, though there are some credit cards that offer no-fee balance transfers.
-
This depends on the card’s provider, but most allow multiple balances to be transferred, up to the new card’s balance transfer threshold.
-
Technically, this is possible, but not all providers allow you to transfer another person’s balance to a credit card in your name. And it is likely that even the providers that do allow this will have some restrictions in place.
For example, the person whose balance you’re transferring may need to be a family member, your partner, or a close friend. Also, only you can request the transfer, not the person whose balance needs to be transferred.
Be aware it is risky to take on someone else’s credit card debt. You should only do it if you trust that they will make the repayments. Otherwise, you’ll need to be happy to pay off the debt if they don’t.
Once you have transferred, the debt will be in your name. This means that you are legally responsible for paying it.
-
Signing up to ANY new card has a small negative impact on your credit score, since 15% of it is based on how long you’ve had the account. However, the longer it’s been open, the credit score improves.
In terms of balance transfers, this will likely add an inquiry on your credit file (leading to a minor decrease in your score in the short term). But, assuming you’ve left your old account open and not taking on more debt, you’re decreasing your balance-to-limit ratio (also known as utilisation rate) and this can improve credit score!
Finally, balance transfer cards are designed to help pay off debt at a faster rate, by decreasing the interest that accumulates. And reducing the amount of debt carried should lead to a better credit score.
-
There is no limit on the amount of times you can transfer balances to a different card - so long as your credit score is enough to be considered for a new card, of course!
-
In theory yes, but many providers no longer accept transfers from American Express credit cards. Additionally, since Amex cards tend to have a 15-digit number on the front compared to the 16 digits on MasterCard and Visa cards, this has been found to cause errors in balance transfer applications online.
-
With most credit card issuers, doing a balance transfer is quite simple. In most cases, you give the details of your existing credit card to the issuer of your balance transfer card, and they will contact the other issuer and make the transfer.
But to make the most of a balance transfer offer, and avoid pitfalls, it can help to follow these five easy steps:
1. Pick the right 0% balance transfer card for you
The longest balance transfer offer isn’t always the best. You need to consider your own circumstances and how much debt you have to repay. Most of the time, the longest balance transfer offers charge a balance transfer fee. If you don’t need that much time to pay down your debt, you can often get a shorter 0% balance transfer offer that avoids a balance transfer fee.
In addition, some balance transfer offers have other perks. These can include a 0% purchases offer or rewards. By comparing cards, you can find one that marries the features that are most important to you. Our balance transfer calculator can show you how much you can save in interest.
2. Transfer your balance
Assuming you’ve been approved for a card, it’s time to make a transfer. Make sure to have the details of your current card on hand. Often, you’ll be able to provide these details with your application and your new provider will take care of the transfer. Otherwise, after you’re approved for your new card, you’ll either have to log into your account or call the new provider to provide details of the balance you’re transferring.
It’s very important to keep in mind that balance transfer cards will often have a window of time after account opening in which to transfer a balance. This usually ranges from 60 to 90 days. Balances transferred during this time qualify for the interest-free promotional period. Balances transferred outside this window will not get the 0% offer.
3. Continue to make payments to your old card
Balance transfers are not instantaneous. That means you should continue paying the debt down on your existing credit card until you see the balance has been deducted. There may be a small amount of interest due after the balance transfer, even if you transfer your balance in full, so it’s wise to check back after the balance transfer is complete. This ensures that you don’t get hit by a late payment fee.
4. Pay down your balance
You will only feel the benefits of a balance transfer card if you actually pay down your balance. The interest-free period will give you some breathing space and help to get your finances under control, but only if you pay down your debt. If you ignore making repayments for the term of the promotional period, then you will end up where you started: facing high interest charges on an existing balance.
5. Be prudent and keep up the good credit card practices!
Now that you’ve paid off your existing balance (or are well on your way), it is also prudent not to rack up new balances. As you may have found already, building up credit card debt can happen rather quickly. And the standard-rate interest on a credit card is not especially pleasant. This can mean simply being careful with how you spend, but can also mean creating and following a budget that helps avoid overspending.
-
When looking at 0% balance transfer cards, you will often see other interest-free promotions, including cards with 0% interest on new purchases. Some cards even offer a dual promotion on both balance transfers and purchases. Whether this would be a good fit for you depends on what you want a card for. If you are focused on getting your existing balance under control, then be wary of taking on debt in the form of new purchases. A 0% interest on purchases offer is not essential when taking out a balance transfer card.
And do bear in mind that the payments that you make towards your credit card balance can get complicated, especially when you’re juggling two 0% promotional periods that are of differing lengths. If you have a card that has, for example, a 0% balance transfer period of 18 months and a 0% purchases period of 6 months, most credit card issuers will apply your payment towards the 0% purchases balance first (assuming you have no other interest-accruing balances on the card), since that promotional period will run out first. But not all issuers do it this way, which can create problems when a cardholder gets confused about where their payment is going.
Which is all to say that if are looking for both a 0% balance transfer period and a 0% purchases period, the easiest choices may be to either find a card with matching 0% periods — that is, 12 months on both purchases and balance transfers, for example — or take out separate balance transfer and 0% purchases credit cards. Otherwise, if you take out credit card with differing 0% promotional periods, just be sure to carefully read the small print, to ensure you know how your payments will be applied to your balances.