What is a 0% balance transfer credit card?
A 0% balance transfer credit card can help you pay off your outstanding credit card debt by moving the balance from one card (or multiple cards) where you might be paying interest to a new one at a 0% interest rate for a set period of time. This could help you reduce the interest you have to pay and help you pay off the outstanding balance quicker.
Frequently asked questions
What happens when the 0% interest-free period ends?
Once your interest-free period ends, a higher rate of interest may be applied to any outstanding balances. It’s important that the balance is cleared before your interest-free period ends. However, if you are struggling to do this then at least make the minimum payment each month. You will have to pay a penalty fee for late or missed minimum payments.
What are the pros and cons of a 0% balance transfer card?
Choosing a 0% balance transfer card can you help you pay off debt on an outstanding credit card, which can be handy if you’re being charged a high rate of interest on an existing balance. Typically, these cards charge a one-off fee for a balance transfer – and this is worked out as a percentage of the amount you’ve moved across, typically up to 3 %. But some cards do offer 0% on fees and even cashback which can be bigger than the fee, so you may not necessarily lose money while you cut your debt.
While the savings you can make with an interest free card could outweigh the interest charges on your existing credit card, don’t forget that if you carry out a balance transfer you must make the monthly minimum repayments on time or you could lose the interest free period.
It’s also really important to make sure you are able to clear the debt within the interest free period to avoid fees or interest charges.
How could applying for a balance transfer affect my credit score?
Your credit score is decided by many factors - even just making an application to transfer your credit card balance from one card to another is one of them. Once you apply for and get a new card to facilitate the balance transfer, your credit score could initially go down because you’re taking on more credit, but then improve if you make payments on time.
Why is it important to check the APR rate?
The APR rate, or annual percentage rate, is one way to compare how much using a credit card will cost in the longer term once the interest free period ends. APR is meant to show the amount of interest that you will pay per year when borrowing. For example, if the APR on a card is 20% and you spend £1,000 and don’t pay any of this back, the interest you’ll have to pay back will be £200. So, you would end up paying back £1,200 in total.
Other 0% balance transfer credit cards may also offer you 0% on purchases you make. You need to check the policy details carefully so that you know exactly how long the offers last for, and other terms and conditions may apply. Learn more about credit card APR.
Where can I compare credit cards?
If you think you would benefit from a credit card that shifts debt with 0% balance transfers, it could take just a few compare deals from a range of providers with us. Find a balance transfer credit card that’s right for you.