Balance transfer credit cards let you pay off existing debt by moving the balance to a new card with a lower interest rate. This means you could clear your debt faster as you won't be paying as much interest.

When to use balance transfer credit cards

Balance transfer credit cards should be used when your existing rate is too high, which can make it more difficult to pay off the balance on your existing card.

With a balance transfer to a new card, you could pay off your debt at a monthly cost you can afford.

If you are looking to cut interest on your balance and find the best card to make purchases at the same time, you may be able to find a balance transfer credit card to help you do both.

How to find the best balance transfer credit cards

When you're looking for the best balance transfer credit card, there are a few things to consider:

  1. Decide how long you need to repay the balance you want to transfer. Divide this by what you can repay each month to decide how long you need. For example, if you repaid 100 a month for 15 months, you would pay off 1,500.

  2. Use the comparison above to find the best deals. Look for cards with a 0% period long enough for you to repay the interest free balance.

  3. Check the fee of each balance transfer credit card. This is charged as a percentage of the amount you transfer (although some cards come with no fee).

How long is the 0% balance transfer introductory period?

With a 0% balance transfer credit card, you can repay the balance without paying interest during an introductory period that can range from one month to more than two years.

This means you will not pay any interest on your balance during that period, but it will go up when it ends. The longer the balance transfer period, the more time you will have to pay it back.

Most providers will state that you must complete the balance transfer within a set period for you to get the 0% deal. For example, you may have to complete the balance transfer within 60 days of opening your balance transfer credit card. This is to stop the rate rising and any fees being applied.

Check the small print in the comparison table to find out the terms for each provider.

How long do you need?

Paying off your balance in the interest-free period helps you save money.

If you have a balance of 2,000 on your current credit card and you can afford to pay back 80 a month, you will need a balance transfer credit card offering a 0% introductory period of at least 25 months: 2,000 80 = 25

This calculation is assuming you are offered a 0% balance transfer card with no fees.

Using the example above, if you are offered a balance transfer credit card with a 0% introductory period of less than 25 months, you will need to switch again at the end of that period. Start early and give yourself six weeks to find a new card.

What is the balance transfer fee?

Some credit cards will charge a small percentage on the amount you want to transfer and this is called the balance transfer fee.

If you make a balance transfer of 2,000 to a credit card with a 2% balance transfer fee, it would cost 40, making your total transferred balance 2,040.
The calculation for this is 2% 100% x 2,000 = 40

The balance transfer fee will typically range between 1% and 5%. Some providers will also charge a set price if you have a small balance to transfer.

You may be offered a balance transfer credit card with a fee of 2.9% or a 5 minimum. If you want to transfer 150 to this card, 2.9% of your transfer amount is only 4.35, so you would have to pay the 5 minimum.The calculation for this is 2.9% 100% = 4.35

How do you choose the APR?

The Annual Percentage Rate (APR) represents the yearly cost of your credit card debt. It includes the interest rate set by the credit card provider and any additional fees and charges.

You will pay a lower rate on top of your balance if you choose a card with a low APR.

If you don't think you will be able to pay off your balance in the 0% interest period, it is good to consider what the interest rate will be, once the introductory period is over.

For example, you might want to transfer a balance of 2,000 and have a balance transfer card offering a 0% rate for 20 months.

If you pay 50 a month, after 20 months you will have paid 1,000 and owe 1,000.

The calculation for this is 50 x 20 months = 1,000. 2,000 - 1,000 = 1,000

If you have a balance transfer credit card with 19.9% APR after the introductory period, you will have to pay 199 on top of your balance.

The calculation for this is 19.19% 100% x 1,000 = 199

If you continue to use the card once the introductory period is over, you will owe 1,000 + 199 = 1,199.

With a balance transfer credit card with 21.9% APR after the introductory period, you will have to pay 219 on top of your balance.

The calculation for this is 21.9% 100% x 1,000 = 219

If you continue to use the card once the introductory period is over, you will owe 1,000 + 219 = 1,219.

These examples assume there are no balance transfer fees attached.

What does the 0% rate cover?

It is important to check what the 0% rate covers on the balance transfer credit cards available to you.

Sometimes the 0% introductory offer applies to balance transfers and not purchases. This means you'll usually have to pay higher interest rates on any purchases with the balance transfer credit card.

Unable to get a long enough 0% balance transfer deal?

If you cannot find a balance transfer that gives you long enough to pay back the full balance before the interest free period ends you could:

  • Use another balance transfer deal once the 0% period ends

  • Get a lifetime balance transfer card that charges a low interest rate for as long as you need to pay it off

There are lots of reasons to have a credit card and a balance transfer credit card may not be the best credit card for your needs. Here are a few others to choose from:

You may also want to consider a personal loan or look at other ways of borrowing.

Balance transfer FAQs

Q

How long will it take to make a balance transfer?

A

It can only take a few days but might take up to two weeks to get a new credit card and up to another week to make the balance transfer.

Q

When should I apply for a balance transfer?

A

Apply at least three weeks before you need the balance on your old card to be paid off.

Q

How much can I transfer?

A

Your provider will let you transfer a percentage of your credit limit (usually 90-95%), e.g. 90% of a 2,000 credit limit would mean you could use 1,800 towards balance transfers.

Q

What will my credit limit be?

A

This confirmed by your provider after they have approved your application. Here is how credit limits work and how much it costs if you exceed it.

Q

How do I repay my balance transfer?

A

Repay the amount that will clear your balance by the end of the 0% period by direct debit so you never miss a payment or pay interest.

Q

Can I transfer money to my bank account?

A

Money transfer credit cards let you send money to your bank account with 0% interest for several months. Here is how to make a money transfer.

Q

Does my credit record matter?

A

Yes, lenders decide whether to offer you a balance transfer as well as what APR and credit limit they offer you based on your credit record.

About our credit cards comparison

Q

Who do we include in this comparison?

A

We include all of the personal credit cards you can get in the UK, apart from those offered exclusively through other companies. They are all from lenders regulated by the Financial Conduct Authority (FCA). Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.