Finance glossary
Balance Transfer
Also known as: Balance transfer card
In simple terms
A balance transfer moves debt from one credit card to another — usually one offering a period of low or 0% interest — so you can pay it down faster without interest piling up.
On this page
What does balance transfer mean?
A balance transfer is when you move an existing debt — typically a credit card balance — onto a different credit card. People usually do this to take advantage of a 0% or low-interest introductory offer on the new card.
While the offer lasts, your payments go towards clearing the debt itself rather than mostly paying interest, which can help you get debt-free faster.
How a balance transfer works
You apply for a card with a balance transfer offer and, if accepted, ask the provider to move over your existing balance (up to a limit). You then repay the new card. Most transfers charge a one-off fee — commonly 1–3% of the amount moved.
The 0% deal lasts for a set number of months. Once it ends, any remaining balance starts attracting the card’s standard (much higher) rate, so the aim is to clear the balance before then.
How could this affect me?
Used well, a balance transfer can save a lot of interest and clear debt faster. Divide the balance by the number of 0% months to see the monthly payment needed to clear it in time.
It backfires if you only pay the minimum, miss a payment (which can end the 0% deal early), or spend on the new card — new purchases often are not covered by the 0% offer and can be charged interest.
Example
Transfer a £3,000 balance to a 24-month 0% card with a 2.9% fee:
| Balance transferred | £3,000 |
|---|---|
| Transfer fee (2.9%) | £87 |
| 0% period | 24 months |
| Monthly payment to clear in time | £128.63 |
| Interest paid during 0% period | £0 |
| Total cost (fee only) | £87 |
Figures are illustrative and rounded. You must clear the balance before the 0% period ends, or the standard rate applies to what is left.
Things to watch out for
- Most transfers charge a fee — factor it into whether the deal saves you money.
- Any balance left when the 0% period ends is charged at the standard, higher rate.
- New spending on the card is often not at 0% and can incur interest.
- Missing a payment can cancel the 0% offer early.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Balance transfer credit cards explained (opens in a new tab). Accessed 22 Aug 2026.