What is a balance transfer credit card?
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In short: A balance transfer card lets you move existing credit card debt to a new card, often with a 0% interest period for a set number of months. You usually pay a one-off transfer fee (typically 1–4% of the amount moved), but it can cut interest costs if you clear the balance before the promotional rate ends.
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Reviewed by Kaiser Khan
Balance transfer cards are designed to help you consolidate and repay existing credit card debt more cheaply. You apply for a new card, transfer one or more balances from other cards, and pay little or no interest for an introductory period — commonly 12 to 28 months depending on the offer and your credit profile.
Most issuers charge a balance transfer fee, expressed as a percentage of the amount transferred. For example, a 3% fee on a £5,000 transfer adds £150 to your balance immediately. Even with the fee, a long 0% period can still work out cheaper than leaving debt on a card charging standard purchase APR of 20% or more.
To make a balance transfer work, treat the 0% period as a deadline, not a holiday. Divide the balance (plus any fee) by the number of months at 0% and set up a direct debit to clear it before the promotional rate ends. When the 0% period expires, the card reverts to its standard APR, which can be high.
Eligibility depends on your credit history and affordability. Applying leaves a hard search on your credit file, and the credit limit you receive may be lower than the debt you hoped to move. Under FCA rules, lenders must assess whether the credit is affordable — do not assume you will be accepted for the longest 0% deal advertised.
Primary source: moneyhelper.org.uk/en/everyday-money/credit/credit-cards
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