A credit card that charges you no interest on balance transfers could be right for you if you want to pay off high-priced credit card or store card debt as quickly as possible. Learn how balance transfers operate and the best way to take advantage of these deals.
What exactly is the term “balance transfer”?
A balance transfer is a way that you can use to pay off existing credit card debt and repay it at a reduced or interest-free rate. This can be accomplished by transferring the balance from one credit card to another.
If you have a credit limit that is sufficient to meet the amount of the transferred debt, the majority of card issuers will let you transfer a balance from another card onto theirs for a one-time balance transfer charge.
However, if you have a significant amount of debt that you need to transfer, you may qualify for one of the many credit cards that offer balance transfers at 0% APR.
How exactly do balance transfers with no interest work?
You can move debt from high-interest credit cards and store cards to a new credit card that has a 0% introductory balance transfer APR, and the interest will be frozen for a defined amount of time; some deals will run for more than two years.
Because of this, you will be able to pay off the debt more quickly and save money because the entirety of your payments will be applied directly to the principal rather than being split between the principal and the interest.
If you have a credit card debt of £2,000 on a card that charges an APR of 18.9 percent and you pay £60 toward it each month, it will take you 46 months and cost you £2,755 to pay off the loan.
In comparison, transferring a debt of £2,000 onto a credit card that charges no interest on balance transfers and maintaining the same monthly payment amount of £60 will result in a total cost of £2,000, clearance of the debt taking 34 months, and a savings of £755.
Which debt transfer credit card is likely to be the most beneficial to you?
When looking for a credit card that allows you to transfer your existing balance without incurring interest charges, you should give careful consideration to the length of the introductory 0% APR period as well as the amount of the balance transfer fee.
There are certain cards that do not charge a balance transfer fee, but there are other cards that charge a fee of up to 2.94 percent for each balance transfer that you make. This means that the expenses might build up quickly if you have many cards whose balances you wish to clear.
In most cases, the charge will increase proportionately with the length of time that the arrangement is in effect. Because of this, it may be in your best interest to steer clear of the offers with the longest terms if you are certain that you will be able to pay off the sum in a more expedient manner.
The entire amount that you owe across all of your credit cards and store cards should be divided by the amount that you are able to pay back on a monthly basis. This is an easy way to determine which offer is the greatest one for you.
The response will provide you with your desired interest-free period, which you may then use as a guide while shopping for a credit card.
If you had obligations totaling £4,000 and could afford to repay them at a rate of £150 per month, you would need a credit card that had an interest-free term that lasted for at least 27 months.
You can easily determine the ideal 0% balance transfer term for you by using the calculator that is provided below.
Where can I get the finest balance transfer offers with no interest?
Here are some of our top recommendations for the most advantageous balance transfer packages currently on the market, organised according to the duration of the promotional period as well as the absence of transfer fees.
Note that the material contained in this article is provided solely for educational purposes and does not in any way constitute professional advice. Before committing to any kind of financial product, you should make sure that you have read and understood the specific terms and conditions that apply to your credit card provider.
Credit Card from Virgin Money for Transferring a Balance34 months 2.70 percent £54.0021.9 percent Representative example: assuming a borrowing of £1,200 for one year at a purchase rate of 21.9 percent (variable), representing a 21.9 percent annual percentage rate (variable). Transfers made at the time of application are subject to a cost of 2.70 percentage points for balance transfers. Credit may be available, depending on your situation. There are some conditions. HSBC Visa Credit Card, Balance Transfer Promotion, 33 Months 2.70 percent £54.0021.9 percent Representative example: assuming a borrowing of £1,200 for one year at a purchase rate of 21.9 percent (variable), representing a 21.9 percent annual percentage rate (variable). Transfers made at the time of application are subject to a balance transfer fee that is 2.70 percent with a minimum charge of £5. Credit may be available, depending on your situation. There are some conditions. Balance Transfer on a Tesco Bank Clubcard Over a Period of 32 Months 32 months 2.59 percent £51.8021.9 percent Representative example: assuming a borrowing of £1,200 for one year at a purchase rate of 21.9 percent (variable), representing a 21.9 percent annual percentage rate (APR) (variable). Transfers made at the time of application are subject to a balance transfer fee that is equivalent to 2.59 percent of the transfer amount. Credit may be available, depending on your situation. There are some conditions. Credit Card Transfer Plus Offer from M&S Bank for Mastercard Customers 32 Months 1.99 percent 39.80 percent 21.9 percent Representative example: a loan of £1,200 for one year at a purchase rate of 21.9 percent (variable), representing a 21.9 percent annual percentage rate (variable). Transfers made at the time of application are subject to a balance transfer fee that is 1.99% of the transfer amount. Credit may be available, depending on your situation. There are some conditions. Halifax Mastercard Credit Card with 0% Interest on Balance Transfers for 32 Months 2.89 percent £57.8021.9 percent Representative example: assuming a borrowing of £1,200 for one year at a purchase rate of 21.93 percent (variable), representing a 21.9 percent annual percentage rate (variable). Transfers made at the time of application are subject to a balance transfer fee that is equivalent to 2.89 percent of the transfer amount. Credit may be available, depending on your situation. There are some conditions. Mastercard’s Credit Card with the Longest Interest-Free Grace Period for Balance Transfers Offered by MBNA Limited That’s 32 Months 2.89 percent £57.8021.9 percent Representative example: assuming a borrowing of £1,200 for one year at a purchase rate of 21.94 percent (variable), representing a 21.9 percent annual percentage rate (APR) (variable). Transfers made at the time of application are subject to a balance transfer fee that is equivalent to 2.89 percent of the transfer amount. Credit may be available, depending on your situation. There are some conditions. The Bank of Sainsbury’s Mastercard Credit Card with a Balance Transfer APR of 30 Months30 months 1.50 percent £30.0019.9 percent Representative example: a borrowing of £1,200 for one year at a purchase rate of 19.95 percent (variable), representing a 19.9 percent annual percentage rate (variable). Transfers made at the time of application will incur a balance transfer fee of 1.50 percent, with a minimum charge of £3. Credit may be available, depending on your situation. There are some conditions.
The data are accurate as of April 14th, 2022.
Who among the credit card companies offers the greatest balance transfer options?
You should look into how good a provider is in addition to the length of a 0 percent balance transfer deal and the charge, even if it is difficult to determine how good a service is before you become a customer of that provider.
Before you apply for a credit card, you will find it helpful to review the ratings that Which? has given to 26 of the most prominent credit card companies. These ratings will help you determine how each company performs in terms of customer service, fees, and advantages.
bestows its coveted Recommended Provider distinction on businesses who excel both in providing excellent value to customers and in meeting or exceeding their expectations in that regard.
Note that the material contained in this article is provided solely for educational purposes and does not in any way constitute professional advice. Before committing to any kind of financial product, you should make sure that you have read and understood the specific terms and conditions that apply to your credit card provider.
| Credit card type | 0% balance transfer time | Balance transfer cost | Cost of transferring £2,000 | Representative APR (%) |
|---|---|---|---|---|
| Tesco Bank 32-Month Balance Transfer Credit Card | 32 months | 2.59% | £51.80 | 21.9% |
| example: borrowing of £1,200 for one year, at a purchase rate of 21.93% representative 21.9% APR (variable). Credit available subject to status. | ||||
| Halifax Longest 0% Balance Transfer Credit Card | 31 months | 2.99% | £59.80 | 21.9% |
| example: borrowing of £1,200 for one year, at a purchase rate of 21.94% representative 21.9% APR (variable). Credit available subject to status. | ||||
| Tesco Bank 27-Month Balance Transfer Credit Card | 27 months | 1.19% | £23.80 | 21.9% |
| example: borrowing of £1,200 for one year, at a purchase rate of 21.94% , 21.9% APR (variable). Credit available subject to status. | ||||
| Tesco Bank 20-Month Balance Transfer Credit Card | 20 months | 1.99% | £39.80 | 20.9% |
| example: borrowing of £1,200 for one year, at a purchase rate of 20.94% (variable), 20.9% APR (variable). Credit available subject to status. | ||||
The data are accurate as of the 11th of March 2022.
You might also be interested in looking through our reviews of credit cards for additional information on each service provider.
guiding principles for balance transfers with zero percent interest
When you already have a credit card that offers a balance transfer with no transfer fee, there are a few things you need to keep in mind in order to continue on the correct path. The most important guidelines are outlined down below for your reference.
Make sure you pay at least the required minimum, if not more.
Although it is imperative that you make at least the minimum amount on your balance transfer credit card, you should attempt to pay back more than this in order to assist in clearing what you owe.
If you are late with a payment, the vast majority of credit card firms reserve the ability to rescind an agreement at any moment, which means that you will be subject to interest charges at their usual rate.
Set up a direct debit to reimburse the minimal amount or extra if you want to make sure you don’t fall behind on your payments and keep on track with your goals.
Avoid making purchases with the card.
Be wary of making purchases with a balance transfer card because doing so can result in significant fees.
charge
There are some credit cards available for balance transfers that provide a promotional period during which the cardholder is exempt from paying interest on purchases made with the card. However, the promotional periods associated with these cards are typically shorter than those associated with standalone deals.
When considering a balance transfer, keep in mind that your primary objective should be to pay off your existing debt rather than accrue additional debt in the process.
Put a reminder on your calendar for the date when the 0% discount will stop.
It is imperative that you pay off your amount in full before the introductory balance transfer offer of 0% interest expires. This will allow you to avoid being forced to switch to the higher standard interest rate.
Therefore, it is in your best interest to establish a direct debit for the monthly amount necessary to repay the debt within the 0 percent interest period, and you should also set a reminder for the date when the deal will expire in order to give yourself sufficient time to make other arrangements if you are unable to do so.
Shift your debt again
If, at the end of the introductory 0% APR term, you still have debt that has to be paid off, you should carefully consider transferring the remaining balance to a new card that offers 0% APR on balance transfers. If that is not possible, you should move the balance of the loan to a card that has a reduced annual percentage rate (APR).
FAQ on Balance Transfers
Have a burning question regarding balance transfers? See if the question and answer section below already addresses it.
Should I apply for a debt transfer credit card that doesn’t charge me any fees?
Those who already carry a balance on their credit cards or store cards and want to reduce the amount of interest they pay as well as the total amount they owe more quickly might consider applying for a credit card that offers a 0% interest rate on balance transfers.
Does transferring a balance have an effect on your credit score?
The impact on your credit score of transferring a balance from one card to another can be either favourable or bad, depending on a variety of factors.
When your credit utilisation, or the percentage of your available credit that you use each month, is low, creating a new account can help enhance your credit history over the long term. This is especially true when the account in question is a checking account.
If you transferred a balance of £1,000 from a credit card with a limit of £2,000 to one with a limit of £4,000, your utilisation rate would drop from 50 percent to 25 percent, which would make you appear to be a more responsible borrower.
Keep in mind that each time you apply for credit, a hard search will be recorded on your report, and frequent applications can have a negative impact on your credit rating. This is another reason why it is essential to know this fact.
The key to minimising the effect that this aspect has on your score is to conduct thorough research and shop around for the offer that works best for you.
Should I get rid of my old credit card once I’ve transferred the balance to a new one?
After you have successfully transferred the balance from your old card to your new card, the balance on your old card will be removed, allowing you to terminate the account.
There is a correlation between the amount of time you have credit accounts open and your credit score. As a general rule, the longer you have credit accounts, the better your score will be, thus it may be beneficial to keep an old account active.
Maintain in mind that if you keep the card but don’t use it, it will become a potential target for fraud, and the amount of credit you have on the card could have an effect on the affordability calculations for other sorts of borrowing, such as for a mortgage. Additionally, if you have a balance that is available to spend, it may tempt you to incur additional debt.
In the end, whether you close the account or not relies on the goals you have set for yourself and how well you can resist temptation.
Is it possible to transfer a balance from an American Express card?
Credit cards that are issued by American Express often have a card number that consists of 15 digits as opposed to a card number that consists of 16 digits.
Since of this, transferring debt from an American Express card might be difficult because internet systems have a difficult time recognising the shorter set of numbers.
In some situations, all you have to do to complete the transfer is call the customer service number for your new credit card company. However, in other scenarios, you might not be able to complete the transfer. Before applying for the service, you should make sure the provider is able to handle problems of this nature.
Is it possible to transfer a portion of a balance from one credit card to another?
A balance from one credit card can be moved to another credit card that specialises in balance transfers in its entirety or in part.
What are the steps involved in transferring a balance from one card to another?
If you apply for a card that offers a 0% interest rate on balance transfers, you will be prompted to indicate whether or not you intend to transfer a balance.
At this point, you will be able to input the card number of the location where your existing debt is housed as well as the balance that you wish to transfer.
You will still be able to carry it out at a later time even if you choose not to do it now. To get the most out of the promotional time where you pay no interest, you should move your balance as soon as possible as it becomes available to you.
Be wary of any fine language that states you have between 60 and 90 days after receiving the card to make a transfer in order to take advantage of benefits such as a reduced balance transfer cost.
Can I transfer my balance between other cards issued by the same company?
A balance transfer offer cannot be utilised in order to move debt between the same financial institutions as the original debt.
You are in luck because there are a multitude of balance transfer providers from which to choose, which means that you ought to be able to find a different company with a card that can assist you.
What if the credit limit I get for transferring my balance isn’t sufficient enough?
You have two options available to you in the event that the credit limit you apply for does not suffice to meet the amount of the balance you wish to transfer.
You may transfer what you can onto the new card and make due with what you have, or you could apply for another card in the hope that the provider would grant you a higher limit on the one they give you.
You should just keep in mind that having several credit checks done could send up red flags, which could result in you not being accepted for the deal or receiving a lower offer.
How much of my monthly credit card bill should I put toward the balance transfer each month?
You should make sure to pay off at least the minimum repayment on your 0 percent balance transfer arrangement, but ideally, you should try to payback sufficient amounts each month to clear the debt during the 0 percent interest period.
How can I make the payment for the charge to transfer my balance?
The majority of credit cards assess a one-time balance transfer fee of up to 4 percent, which is applied to the amount of debt you are attempting to move.
This does not need to be paid in full up front, but rather it will be added to your overall loan amount and will remain interest-free for the entirety of the time that your arrangement is in effect.
Are balance transfers subject to transferability?
You are possible to transfer a balance that has previously been a balance transfer as long as you have a credit limit that is available to you or a new card that is capable of taking it on.
Can I make purchases using the credit card that I’m using for the balance transfer?
As long as there is room on your card’s credit limit for additional charges, you can use the same credit card that you used for the balance transfer to pay for new purchases.
Be aware, however, that it is highly unlikely that new purchases will be interest-free; rather, they will be subject to interest at the usual rate. This runs counter to the objective of a deal offering 0% interest on balance transfers.
Will the headline balance transfer offer be available to me?
In most cases, the duration of the promotional offers that are made accessible to you will be determined by your own life circumstances.
People who have a worse credit rating could be given a shorter period of time in which to pay off their debts without accruing any interest charges.
Some service providers make available something called a “soft search,” which enables you to determine whether or not you will be qualified for a certain offer without having to submit an application and so make a notation on your credit history.
What are the consequences if I am unable to make the minimum payment on my balance transfer credit card on time?
When the interest-free time on one 0 percent card comes to an end, some people switch to another 0 percent card so that they don’t have to pay any interest. However, your credit history will determine whether or not you are able to accomplish this.
It’s important to keep in mind that the number of credit applications you submit in a short period of time can have an effect on your credit rating, so try not to submit too many at once.
