Compare Balance Transfer Credit Cards

Interest rates piling onto your debt can make it much harder to clear your balance. With a balance transfer credit card, you can move your debt and save on the interest.

Compare balance transfer credit cards

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Last updated February 2021

What is a balance transfer credit card?

A balance transfer credit card is a card that lets you move existing debt from one card to another. If you have a credit card with high-interest rates, you can transfer that balance to a new card with a better rate.

How do balance transfer credit cards work?

Balance transfer cards work by allowing you to transfer your existing debt on one card to another credit card. There is usually a fee to pay for this, which may or may not be worth it depending on how much interest you are being charged.

Many balance transfer credit cards have introductory offers which will let you do free 0% balance transfers for a set period. If you have mounting debt on one credit card with high-interest rates, opening a balance transfer credit card could be the best way to save money and clear your balance faster.

Sometimes balance transfer credit cards also have an interest-free period as well as free balance transfers. This means that the debt you transfer to your new card won’t be subject to interest rates.

Advantages of a balance transfer credit card

A balance transfer credit card can be a fast, simple and pain-free way to save yourself money. Interest rates can pile up and become very costly, all while making it harder to clear your original balance. A balance transfer credit card solves that problem.

Here are some other advantages of a balance transfer credit card:

  • 0% interest - Not only do many balance transfer cards offer free transfers, but you can also get 0% interest credit cards as well.
  • Consolidate several credit cards - If you have several different credit cards and are paying interest on each of them, a balance transfer lets you consolidate them all into one place. This means you can save money on all that interest and also have a simpler way of managing all your debt in one place.
  • Clear your debt faster - Without interest fees applied to your balance, it means the only thing you are paying off is the debt itself. This lets you clear your credit card balance much faster.

Disadvantages of a balance transfer credit card

While the advantages of a balance transfer credit card are a great way to save money, there are also some downsides to be aware of.

  • Balance transfer fees - Not all balance transfer credit cards are free to transfer. In most cases, you will need to pay a balance transfer fee. However, if you haven’t yet picked a credit card to transfer to, it may be worth finding one that offers free balance transfers to save on the fees.
  • You could lose your 0% interest benefit - If you transfer to a credit card with 0% interest, you will need to make sure you make at least the minimum payment each month. If you miss a payment, you may lose your 0% interest and end up in the same position as before you transferred your debt - paying off high-interest fees.
  • Options may be limited if you have poor credit - If your credit history isn’t the best, you may have limited options for balance transfer credit cards. You may only be able to get a credit card with higher interest fees or a fee to pay on balance transfers.

Balance transfer credit card FAQs

We have listed out some frequently asked Balance Transfer Credit Card questions.

Balance transfer fees usually work as a percentage of the amount you want to transfer. This percentage will differ between banks, but it usually ranges between 1% to 3% of the total amount you wish to transfer.

Taking out any type of loan or credit card will have some impact on your credit rating. This may cause an initial drop in your rating, but it isn’t necessarily a bad thing. If you are trying to clear your debt and can commit to paying the minimum (or preferably more) off each month, a balance transfer credit card can actually be a good way to build a healthy credit rating.

Lenders will always look at your credit rating to approve or reject any applications for credit. There are specific credit builder cards and credit cards designed for people with bad credit on the market. However, just because you have bad credit doesn’t mean you can’t get a balance transfer credit card. Be aware that your credit limit may only be small, and you may attract high-interest rates.

If you are not planning to use the card again, you may want to destroy it. Even if it expires or your account is closed, an identity thief may be able to use the card’s information for fraud. However, there is a downside to closing your old credit card account. This reduces your overall credit utilisation, which is how much credit you’ve taken out versus how much you can take. If your credit limit is smaller, this turns whatever debt you have into a bigger percentage of your overall credit limit.

As everyone’s circumstances are different, there is no ‘best balance transfer credit card’. However, by using a comparison website, you’ll be able to find the best balance transfer credit card for your needs.

Depending on your circumstances, it may be possible to get multiple balance transfer credit cards. However, you can not have more than one balance transfer credit card from the same bank, or in some cases, a banking group.

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