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Should you transfer your credit card balance?

Balance transfers can help you to lower the cost of your credit card borrowings and consolidate multiple debts. They could potentially help you lower your outgoings as well.

What is a balance transfer?


Make sure you repay your debt before the introductory interest rate period runs out. You can’t assume that you’ll qualify for another balance transfer deal.

Transferring your balance means moving all or part of a debt from one credit card to another.

People often use them to take advantage of lower interest rates.

Switching your debt to a card with a lower interest rate lets you:

  • pay less interest on your existing debt (but you’ll usually pay a fee), and/or
  • organise your finances by consolidating multiple monthly payments into one.

How to transfer a balance

Speak to your bank or credit card company, or check their website, to find out how to transfer your balance.

You might be able to do this online.

What it costs


Don’t make purchases with a credit card that you have made a balance transfer to, as you’ll only add to your debt.

Credit card companies usually charge a fee for balance transfers.

This will often depend on the size of the transfer and possibly the length of the introductory period.

Be sure to check the fee and take this into account when calculating potential savings.

Things to watch out for

  • Interest rates: most balance transfers offer a better interest rate (often 0%) for a period – this can vary considerably. Once that finishes, the interest rate will go up. Check if the final rate is competitive with other cards.
  • Transfer limits: you’ll need to transfer an amount that’s within the credit limit on your new card, minus the fee.
  • Credit card providers might try and sell you fraud protection and lost card services. The benefits might not be that worthwhile as you’re protected by law already to some extent.
  • It’s usually recommended not to make any purchases with a credit card to which you have made a balance transfer. This is because any purchases you make will usually be charged at your card’s standard rate (unless there is a 0% deal on purchases too – if there is, check how long that lasts).

This article is provided by the Money Advice Service.

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