A guide to moving your debt with a balance transfer credit card - What is it and how does it work?

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According to the Financial Standards Authority (FSA), 41% of people in the UK do not completely understand how a balance transfer credit card works, as reported by ClearScore.

For British consumers who are looking to move their debt onto one credit card in order to pay it off with low interest (or no interest), a balance transfer card is an ideal solution as many banks offer long interest-free periods lasting months or more than a year. This offers a cheaper and quicker way of solving debt problems. 

Having said this, the many people that don’t fully understand how this type of card actually works might be at risk of paying fees that they didn’t realise they had to pay when they initially got the transfer card, which makes this method more expensive and could bring about further problems.

If you’re considering getting this type of card, our guide below explains what a balance transfer is, the benefits, what you’ll need to look out for and a list of the best cards currently on the market.

What is a balance transfer?

In simple terms, a balance transfer involves moving any debt that you currently have over to a new credit card.

In general, these types of cards are used to pay off credit card debt, but you may be able to pay off different types of debt depending on the provider you go with.

This new ‘balance transfer’ credit card will either come with a much lower interest rate or an interest-free period (most transfer cards come with this feature attached).

Most people tend to get this type of card for the interest-free period, but it is vital that you are aware of when this period ends as the interest rates will go back up after this and you’ll have to pay more. It’s a good idea to make a note of the end date and try to pay off the debt within the 0% interest period to avoid further charges.

What is the difference between a balance transfer and money transfer?

It’s worth knowing the difference between these two just so you don’t get confused when doing your research online or speaking to providers.

Differing from a balance transfer, where you move your credit card debt over to a lower interest/interest-free credit card, a money transfer involves using your credit card to transfer money straight into your bank account. So in this instance, you’re not paying off existing credit card debt, you may be paying off other debts, an overdraft or you are paying for something specific.

There is usually a fee to do this, however, so be sure you understand how much this is and speak with your credit card provider to make sure it’s possible to do this. Generally, you will get charged a percentage of the amount you are transferring over to your bank account.

How do you do a balance transfer?

The process of a balance transfer usually involves the following steps:

  1. Examine your current situation: Look at your existing credit card balances and interest rates as you will need these details when choosing a suitable provider and transfer card. You should look to get one that will accept the amount of debt you wish to transfer and one that has a lower interest rate than the ones you’re currently paying.
  2. Choose a balance transfer credit card that suits you: When comparing deals online with different providers, make sure you look at the APR and see if there is a 0% period, check the duration of the low-interest or interest-free period, as well as any fees.
  3. Make sure you read and understand the terms and conditions of your chosen balance transfer card: When doing this, you want to double-check over things like the balance transfer fee to see how much it is going to cost you to make the transfer and how much interest you will save. This will help you see if it is really giving you the best deal. It’s also worth checking credit limits and restrictions.
  4. Apply for your chosen balance transfer card: As long as you are happy with the deal, you have read and understood the Ts and Cs and you are confident that it won’t cause you to enter further debt, you can apply online with the provider. Important: A hard credit check may need to be carried out on your credit report, which may result in a short-term drop in your credit score. Despite this, it does open up your credit availability and utilisation (provided you are accepted), which could lead to an increase in your credit score, so overall, getting a transfer card shouldn’t affect your score too much. It will negatively impact it if you are declined due to a poor credit history or you have already been declined by other providers. More on this below.
  5. Contact the balance transfer credit card provider: Once you have been approved for the balance transfer card, you should then get in touch with the provider regarding the request to transfer your credit card debt to the new card. The provider will need to know the account number of each old credit card (the ones your moving the debt from) as well as the balance (amount) you wish to transfer to your new card.

Once you have completed the above, the balance transfer has been approved and the amount you wish to transfer has been moved onto your new card, you can start paying off the debt on the balance transfer card as per the terms and conditions.

Depending on your provider, you may be able to transfer all of your debt onto the new card, in which case, the old credit card (s) will be wiped clean. If you’re unable to transfer it all over, however, make sure you still keep up with any payments (minimum payment at least) on any remaining cards.

Remember: if you miss any payments on your credit cards, this will be marked on your credit report and your score will plummet as a result. Also, if you make a late payment on your balance transfer credit card, it could result in your provider cancelling your low introductory rate or interest-free period.

How long does a balance transfer take?

Your new provider should be able to give you an indicator as to when the debt will transfer from one card (your old card, or cards) to another (your new balance transfer card).

Generally, it can take days or weeks for the provider to process the transfer - it all depends on the issuer and how they work.

For this reason, it’s important that you keep up with monthly repayments on any old cards until the transfer has been processed. If you fail to do this, any late or missed payments will affect your credit rating as well as the amount of debt you owe.

Does a balance transfer count as a payment?

Yes, it does. A balance transfer involves making a normal payment to the appropriate credit card company, who will receive it as usual. The payment does not come from your bank, but from the transfer card.

It is vital that you do not miss any payments as per your transfer card’s terms, as this will negatively impact your credit rating and potentially your deal with the balance transfer provider.

What credit score do you need for a balance transfer card?

Generally, most balance transfer providers will want you to have a ‘good’ or ‘excellent’ credit score in order to approve you for a transfer card with them.

For example, if you check your score with credit reference agency (CRA) Experian, you’ll need a score of between 881 and 960 for a ‘good’ credit score, or between 961 and 999 for an ‘excellent’ rating.

The only problem with just checking one CRA is that you don’t know if the lender will use Experian or one of the other main UK CRAs to check your score, and scores do differ between agencies. For this reason, we highly recommend getting a multi-agency credit report from Checkmyfile, which uses all four CRAs to provide you with a score and detailed credit report. The first 30 days are free, and it’ll cost £14.99 after that, but you can easily cancel if you don’t want to pay the subscription fee.

Sign up here:

Check Your Score

What if my credit score is bad?

If you have a fair, poor or very poor credit score then you are unlikely to be successful in your application as they will be concerned about your ability to meet the terms and conditions, such as making payments on time and in full.

If your application gets rejected will be marked on your report and subsequently reduce your score further, so this is why it’s always important to check your score before applying for any type of credit agreement, so you at least have a good idea regarding your eligibility and whether or not you should apply or work on increasing your credit score first.

Some providers may accept people with bad credit, but they’ll account for the risk they pose by attaching very high-interest rates, which will increase the amount of debt you owe, take longer for you to pay the debt off and ultimately, this defeats the object of getting a balance transfer card.

Instead of a balance transfer card, you may want to look into the following:

  • Get a secured credit card (ensure you know what the risks and terms are first)
  • Improve your credit score (this can take time, so you’ll need to be patient)
  • Other ways of paying off your debt that does not involve a transfer

Are balance transfers bad for your credit?

Yes, carrying out a balance transfer may hurt your credit in the event that:

  • A hard enquiry is carried out on your credit report (this may only be a temporary impact)
  • Your application gets denied (this will be reported on your report and more than one hard enquiry makes you seem like you are financially desperate, which puts lenders off)
  • You miss any payments (late payments can have a huge affect on your score, so always make sure you can make them on time).

It’s also worth noting that getting a balance transfer card is the same as opening a new account or starting a new line of credit, which effectively reduces the average age of your accounts and could cause a temporary drop in your score. While this shouldn’t impact your rating too much, make sure you don’t close any older accounts at the same time as this will be detrimental to your rating.

15 of the top UK banks that offer balance transfer credit cards

Here are some of the most well-known balance transfer providers in the UK. Some will offer deals with no fee, depending on the interest-free period and your eligibility, so be sure to check out their terms online.

  • Natwest
  • Halifax
  • Capital One
  • HSBC
  • Barclays
  • RBS
  • Tesco
  • Virgin
  • Aqua
  • Santander
  • Nationwide
  • Sainsburys
  • PayPal
  • Vanquis
  • Lloyds

While we have listed 10 of the most common providers above, there are a lot more providers out there, so it pays to do your research and weigh up the pros and cons of each. It’s also a good idea to check out real-life customer reviews online to see how they’ve got on with the company’s product and services.

Pros and cons of balance transfer credit cards

When deciding whether or not getting a balance transfer card is the right thing for you, it pays to weigh up the benefits and drawbacks. As with anything, there are always pros and cons, but you need to be comfortable with taking the potential risks and fully understand the consequences.

Some industry experts recommend that you choose a balance transfer credit card provider with whom you already have a bank account, credit card or mortgage.


  • If your existing debt comes with a high-interest rate, a balance transfer card helps reduce that significantly, either with a low APR or 0% interest-free period - which lowers your overall debt.
  • It allows you to consolidate your debt, i.e. put it all into one place so that it’s more manageable with just the one monthly repayment.
  • You can transfer your balance on to a credit card that has much better terms and conditions, helping you have more control over your debt.
  • Some interest-free periods last as long as 29 months, giving you more than 2 years to focus on paying off your debt with no added interest.
  • Since the Covid-19 pandemic, a lot of providers are coming back to the UK market offering better deals with better terms and conditions for those looking to borrow or get a balance transfer credit card.

A balance transfer credit card can be a very effective way of cleaning your debt, provided you stay true to a regular payment plan and you understand all the terms, conditions and potential risks.

What to look out for - potential disadvantages

  • You are likely to be charged a fee for moving your debt on to the new transfer card (usually between 1% and 5% of the total amount you are transferring. Always check the provider’s handling fees before committing to a deal and make sure that it won’t cost you more than what you would save by transferring your debt over to a balance transfer card.
  • Once the low-interest or interest-free period ends, the interest rates will increase again, so try to get a longer deal if you want the most time to clear your debt without high APRs.
  • There may be a limit as to how much debt you can transfer onto the card.
  • You might not be able to make purchases on your balance transfer card - check this with the provider and deal.
  • If you try to take cash out using your balance transfer card, you’ll probably face very high-interest rates on top of that and it may also cancel your introductory low-interest or interest-free period.
  • Be very careful when looking at deals online - some deals may state things like ‘up to 29 months’, but in reality, you could actually be offered less when you apply, in addition to a higher fee than was initially advertised. This is why it’s worth checking your eligibility before applying (by checking your credit score or using an eligibility calculator).

Key tips for using a balance transfer - Need-to-knows

To sum up, here is a list of things you should be sure to do when looking and applying for a balance transfer deal:

  • Always compare deals and identify the best offers for your personal situation before choosing one.
  • Keep up with your monthly repayments on time and in full - missing payments will hurt your credit.
  • Aim to clear your debt before the 0% or low-interest period ends.
  • Don’t make multiple applications for a balance transfer card as this will hurt your credit rating.
  • Make sure you do the balance transfer as soon as you can (within the first 60-90 days) to ensure you get the 0% offer.
  • Don’t close old accounts straight away as this will negatively impact your credit score.
  • Avoid withdrawing cash and making purchases on your balance transfer card.

And finally, once you have paid off all of your debt (hooray!), try to stick to a budget plan so that you don’t fall into debt again in the future.

Check out our guides below for further tips and related advice.

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