A balance transfer can be one of the smartest moves you make when dealing with credit card debt — or one of the most expensive mistakes, depending on how you use it. This guide walks you through everything you need to know.
A balance transfer is when you move debt from one credit card to another — usually to take advantage of a 0% interest promotional period. During this period, no interest accrues, so every penny you pay reduces your actual debt.
Simple example
You owe £2,000 on a card charging 22% APR (about £37/month in interest). You transfer to a 0% card for 20 months with a 2.5% fee (£50). For 20 months, no interest — just £100/month would clear the entire debt. Without the transfer, £100/month at 22% APR would leave you with nearly £600 still remaining.
Most balance transfer cards charge a one-off fee when you move the debt. In the UK, this is typically:
So if you transfer £3,000 with a 2.5% fee, you'll owe £3,075 on the new card. You'll still save significantly compared to paying high APR interest.
In almost all cases where you're paying high APR interest, a balance transfer will save you money — as long as you clear the debt before the promotional period ends.
Not clearing the debt before the 0% period ends
This is the big one. When the promotional period expires, the remaining balance usually reverts to a high APR (often 20–25%). Set up a direct debit to pay an equal portion every month.
Using the new card for purchases
New purchases on a balance transfer card often attract standard APR from day one. Keep this card for the transferred balance only.
Missing a payment
Many balance transfer offers include a clause: miss one payment and the 0% deal is cancelled immediately. Set up a direct debit for at least the minimum.
Not accounting for the transfer fee
The fee isn't free money — it gets added to your balance. Factor it into your calculation of whether the transfer is worthwhile.
Applying for too many cards in a short period
Each application leaves a mark on your credit file. Too many applications in 6 months can reduce your credit score and affect future approvals.
Check your credit score (Experian, Equifax, or ClearScore — all free)
Compare 0% balance transfer cards (MoneySuperMarket, Compare the Market, MoneySavingExpert)
Apply for the card with the longest 0% period and lowest fee that fits your score
If approved, request the balance transfer (usually done online or by phone)
Set up a direct debit for the right monthly amount to clear the balance before the period ends
Cut up or lock away your old card
Never use the new card for purchases
Track your progress with cashstr.app
Whether you do a balance transfer or not, tracking your debt in one place makes a huge difference. cashstr.app shows you your interest saved in real time and helps you make confident payment decisions.
Start Free Trial →