Balance Transfer Credit Cards Explained (UK)

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Key takeaways

A balance transfer moves debt to a card with a lower rate for a limited time
Compare the transfer fee and the length of the offer, not just the 0%
Make every payment on time, or you may lose the offer
Clear the balance before the offer ends if you can
If you are struggling to pay your debts, get free advice before applying for new credit

A balance transfer card lets you move debt from one or more credit cards to a new card that charges a low or 0% rate for a set period. Used properly, it can save a significant amount of interest and help you clear the debt faster. Used badly, it can lead to a bigger problem. This guide explains how transfers work, what they cost and who they suit.

How a balance transfer works

You apply for a new card with a balance transfer offer. If you are accepted, the new card provider pays off some or all of the balance on your old card, and you now owe that amount to the new provider. During the promotional period, which may last from a few months to over two years, you pay either no interest or a low rate on the transferred amount. After the period ends, the rate usually rises to the card's standard rate on any remaining balance.

You can usually only transfer debt from a card or store card issued by a different company. Transfers between cards from the same provider are generally not allowed. Some providers also allow transfers of overdraft or loan debt through money transfers, though these are usually less favourable.

The costs

Transfer fee

Most cards charge a fee of a percentage of the amount you transfer, typically a few per cent. Because the fee is added to the balance, a card with a lower rate and a longer period can still cost less overall than a 0% card with a higher fee. Always compare the total cost, not only the length of the 0% period.

Standard rate after the offer

When the introductory period ends, the card's normal APR applies. If you still have a balance, it can become expensive.

Fees and rates for new spending

Many balance transfer cards charge a higher rate for purchases than other cards. Using the card for new spending can lead to complications when payments are allocated. Typically, payments go first to the balance with the lowest rate, so the amount at the standard rate can remain while your 0% balance falls. Avoid using a balance transfer card for new spending unless you are certain of the terms.

Who can benefit

A transfer may be worthwhile if:

You have an expensive credit card balance
You can afford to pay it down within the promotional period
You are likely to be accepted for a new card with a good offer
You will not run up new debt on your old cards

It is less suitable if you are already behind on payments, struggling to meet minimums or likely to be declined. In those cases, speak to a free adviser at StepChange, National Debtline or Citizens Advice.

How to use a balance transfer well

Check your credit report and use an eligibility checker. This shows the cards you are likely to be accepted for without leaving a hard search. See how to check your credit report.
Compare the total cost. Add the fee to the debt and divide the total by the number of months in the offer. This is roughly the monthly amount you need to pay to clear the debt in time.
Apply for the card. Note the credit limit you are offered. It may be lower than the amount you want to transfer.
Request the transfer straight away. Some providers only apply the offer rate to transfers made within a short window, such as 60 or 90 days.
Keep paying the minimum on your old card until the transfer is complete. Transfers can take days or weeks and a missed payment would be recorded.
Set up a direct debit for at least the minimum, plus a fixed payment that will clear the balance before the offer ends. Missing a payment can cancel the promotional rate.
Do not use the old card again unless you can pay it off each month.
Plan for the end of the offer. Before the promotional period ends, either clear the balance, or transfer to another card if you are eligible and it is cost-effective.

Our debt repayment calculator can help you see how much to pay each month.

Risks and pitfalls

Missing a payment may end the promotional rate immediately.
A lower limit than expected may mean you only transfer part of the debt.
Being declined leaves a mark on your credit file.
Repeated transfers can harm your credit score and are not a long-term solution.
Running up the old card again leaves you with double the debt.
Using the card for purchases can create awkward interest charges.
Assuming the rate will last forever. The promotional period has an end date.

Alternatives

A 0% purchase card if you are planning a purchase rather than moving existing debt
A personal loan with a fixed rate and a fixed end date; see personal loans explained
A debt management plan, where a free adviser negotiates with your creditors and, if you qualify, interest may be reduced or frozen; see debt management plans
Paying off the highest-interest debt first, the "avalanche" method in our guide to paying off debt faster

Money transfer cards

Some cards offer a "money transfer" that places cash into your bank account at a low rate for a promotional period. Fees tend to be higher than for balance transfers, and the cash can be tempting to spend. Use these with great care, and only if you have a firm plan.

Be wary of balance transfer scams

Only apply for cards through reputable providers or comparison sites, and check anyone offering credit is authorised on the FCA Register. Never pay a fee to anyone who says they can arrange a transfer for you.

Frequently asked questions

Is a balance transfer bad for my credit score?

Applying leaves a hard search and opens a new account, which can reduce your score temporarily. Paying the balance down on time can help in the longer term.

Can I transfer a balance more than once?

Sometimes, but each application leaves a search and not every provider will accept you. It is better to plan to clear the debt in the offer period.

What happens when the 0% period ends?

Any balance left moves to the card's standard rate, which can be high. Plan to clear it, or move it again if you can.

Can I transfer a loan or overdraft to a balance transfer card?

Some providers allow it through a money transfer, but terms vary. Check the fees and the rate.

Sources and further reading

Balance transfers — MoneyHelper
Consumer help and guidance — Financial Conduct Authority
Dealing with credit card debt — Citizens Advice

This page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.

Written by

MoneyBrink Editorial Team — Editorial team

The MoneyBrink Editorial Team researches, writes and reviews every guide on this site. We work from official UK sources such as GOV.UK, the Financial Conduct Authority, MoneyHelper and the Money and Pensions Service, explain things in plain English, and update articles when the rules change. We do not sell financial products and we do not give personal advice.

Read how we research and check our guides in our editorial policy.

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Balance Transfer Credit Cards Explained