Finding the best balance transfer credit card for you

Balance transfer cards are a unique type of credit card. Learn how they work, why you would need one, and how to find the best balance transfer cards with our helpful guide.

What is a balance transfer card?

A balance transfer credit card is designed to save you money by allowing you to transfer the balance of an existing credit card to one that won’t charge you any or lower rates of interest for a set period of time.

Typically balance transfer credit card providers will offer a very low or 0% interest rate on your transferred debt for a time – for example, six, twelve or eighteen months.

This means you’ll save money by not paying interest on top of what you already owe or lesser amounts, giving you more time to pay off your balance without having to pay expensive rates of interest.

How do balance transfer credit cards work?

0% balance transfer credit cards work by shifting your debt from an existing credit card to a new one that won’t charge you interest for a set period of time. Your new credit card provider will pay off the balance of your old card.

Some balance transfer credit card providers will charge a fee for making the transfer – usually around 3% – 5% of your existing balance, although some providers will also offer 0% balance transfer fees.

At the end of your 0% interest-free period, you’ll start to pay interest on your balance again if you haven’t paid it off in full. At this point, nothing is stopping you from applying to another balance transfer provider again to give you more time to pay off your balance without being charged expensive rates of interest.

A word of warning here, though – applying for too many balance transfer cards in a short period could harm your credit score.

Is transferring card balances a good idea?

If you take out lots of balance transfer cards in a short period of time, you may find your credit score is affected.

Generally speaking, lenders prefer to see customers using products over a long period of time, but don’t allow this to put you off if you’re planning on making a balance transfer once every six months, especially if you stand to save a lot of money in interest.

Responsible use of a 0% balance transfer card can help you to reduce your credit card balance quicker, which means you’re less likely to get into unmanageable levels of debt, so in the long term, using one could help your credit score.

If you’re disciplined with your finances, using a balance transfer card can save you a lot of money, but you’ll need to keep a note in your diary of when your 0% rate runs out.

Who is eligible for a balance transfer credit card?

Unless you have a good credit history, getting approved for credit card balance transfer offers can be difficult.

Typically issuers require a good or excellent credit score. You can check your credit score for free on apps like Clear Score, Experian and Credit Karma.

Always use an eligibility checker online before applying for a balance transfer card to get an idea if you’re likely to qualify for one. If you apply for a balance transfer card and get turned down, your credit score could be negatively impacted.

To improve your credit score, there are several things you can do.

  • Register on the electoral roll
  • Never miss a bill payment
  • Keep your credit utilisation low
  • Check for errors on your report
  • Avoid moving around a lot
  • Build your credit history by taking out credit building products (such as a credit builder card)
  • Monitor your accounts for fraudulent activity
  • Avoid multiple credit applications in a short space of time
  • Stay within your credit limit
  • Use eligibility calculators before applying for any form of credit

How do I find the best balance transfer credit card?

Finding the best balance transfer credit cards depends on your eligibility and circumstances.

You can’t transfer your balance from the same bank or group, so you need to consider offers that are different from your current credit card provider.

Use an eligibility calculator to show your chances of being accepted. Once you have your results go for the credit card balance transfer offers with the lowest fee in the time you can be sure you’re going to be able to repay your balance.

If you’re not sure how long it will take you to pay off everything you owe, consider choosing the option with the lowest interest rate over the longest period of time.

Can I get a balance transfer card with bad credit?

It’s not impossible, but you’re very unlikely to be accepted for the best balance transfer cards.

The deals open to you are likely to be much more expensive than the leading offers.

Most bad credit balance transfer cards charge higher interest rates once the 0% offer runs out, so be warned. If you can’t be sure you’re going to be able to repay your balance before the higher interest rate kicks in, it might be best to keep your debt on your other credit card – depending on the APR of that card.

What happens when the interest-free period ends?

Once your agreed interest-free period is over, you’ll start to be charged a new interest rate, which you will have been told about before you signed up for the card.

You will start to owe interest on any unpaid balance on your card. You’ll be charged interest on your interest too, so your debts may quickly build up if your card has a high rate of interest, so it’s always best to try and pay off your balance as quickly as you can.

What is a balance transfer fee?

A balance transfer fee is the cost some credit card companies charge when you transfer your debts from one card to another. Some companies charge as much as 3%-5% of your balance.

Some providers offer balance transfer credit cards with no fee, so it’s always worth making a comparison online to see if you can save yourself some money.

What are the advantages of 0% balance transfer cards?

The main advantages of using these credit cards are to clear your debts quicker and consolidate your debts.

If you have outstanding balances on one or more of your other cards that you’re paying interest on, moving the debt to a low or 0% interest balance transfer card can mean significant savings.

It can be easier to keep track of your finances if you consolidate your debts onto one card because you’ll only have one monthly payment meaning you’re less likely to miss it.

What are the disadvantages of 0% balance transfer cards?

If balance transfer cards aren’t used sensibly, you can find yourself in even more debt than you started.

Most providers require customers to have a good or excellent credit rating to be eligible for a balance transfer card.

If you have a patchy financial past, you may only be eligible for short 0% periods and high-interest rates after the 0% runs out. In this case, you might not save enough money to be worth applying for one.

Balance Transfer Credit Card FAQs

What if the credit limit I’m offered isn’t high enough to cover my existing debt?

If you’re unable to shift all your old debt over to your new card, you could try checking your chances of acceptance with another provider. However, applying for too many credit products in a short period of time could harm your credit score.

Can I transfer my partner’s debt to my balance transfer card?

Some lenders allow this, but it’s worth checking before you apply.

Be wary of doing this – the debt will become yours as soon as you do it, so the debt becomes your responsibility. Never feel pressured to do this for your partner – especially if your relationship is new.

Will transferring a balance close my old card?

When you transfer your existing debt from one card to a new card, your old card will remain open. If you wish to close your old card, you’ll need to let the provider know.

More credit card options

We compare a range of credit cards to help you find the best rewards credit card, balance transfer credit card or credit building card for you.